With Trump's election as U.S. president, he promised to replace the SEC chair on his first day in office. Last week, SEC chair Gary Gensler announced he would step down on January 20, 2025, around the time of Trump's inauguration. Following this news, the crypto market sentiment improved, leading XRP, ADA, and other long-term 'SEC securities tokens' that had been under SEC regulatory pressure to surge nearly 30% in a short period.
Regarded as the number one opponent in the crypto space during his tenure
Since Gary Gensler took office as SEC chair, he has maintained a strict regulatory attitude towards the cryptocurrency industry. He has repeatedly emphasized that BTC is the only commodity-like currency, while other cryptocurrencies are mostly viewed as having securities properties, a stance that has garnered considerable controversy and criticism. During his tenure, Gensler took enforcement actions against multiple entities, including Coinbase, Kraken, Robinhood, OpenSea, Uniswap, and MetaMask, completing thousands of enforcement cases and seeking approximately $21 billion in fines, making him a top opponent in the crypto space. Previously, attorneys general from 18 U.S. states even jointly sued the SEC and its five commissioners, accusing the SEC under Gary Gensler's leadership of unconstitutional overreach and unfair suppression of the cryptocurrency industry.
However, despite Gensler's tough stance on cryptocurrencies, during his tenure, he approved the spot ETFs for Bitcoin and Ethereum, undoubtedly injecting a strong boost into the development of cryptocurrencies. This seemingly contradictory action is based on a common logic: to bring cryptocurrencies into the U.S. regulatory framework, which is also a major policy principle of the Biden administration.
Relief from SEC securities token pressure
Gary Gensler's resignation not only relieved many investors and crypto companies who were troubled by regulatory pressure but also brought hope to tokens significantly affected by the SEC, most notably the 'SEC securities token' flagship Ripple.
As early as December 2020, the U.S. SEC began accusing Ripple of illegally issuing unregistered securities. Several platforms, including Coinbase and Robinhood, even temporarily delisted XRP, causing a significant drop in its price. This marked the official start of the lawsuit between the SEC and Ripple, garnering widespread attention in the crypto market. The debate over whether cryptocurrencies fall under securities and whether they are subject to SEC regulation has been contentious, meaning that the final ruling in this case will have a significant impact on the development of the entire cryptocurrency industry.
Whenever news about XRP emerges, there are huge fluctuations, affecting the prices of several altcoins similarly accused by the SEC as securities, such as ADA, MATIC, SOL, FIL, and dozens of other projects, making 'SEC securities tokens' a special sector.
Now, with the resignation of the SEC chair, Ripple, which has had a long litigation with the SEC, has transformed into a 'SEC revenge' concept coin, experiencing a retaliatory rise. Other tokens like ADA and SOL, which have long been under SEC regulatory pressure, have also seen similar gains.
Which cryptocurrency companies targeted by the SEC are likely to benefit?
Currently, Trump has not officially announced his preferred candidate for the new SEC chair, but several popular candidates are friendly to cryptocurrencies and have publicly expressed support for them. Under a crypto-friendly policy, it is expected that SEC's enforcement of cryptocurrency will be significantly reduced in the future, and some staff members within the SEC who have taken aggressive enforcement actions may face layoffs.
This means that tokens like Ripple, which were previously suppressed and sued by the SEC as 'SEC securities tokens,' may see lawsuits soften, settle, or even be withdrawn, and projects that were hesitant to issue tokens or empower tokens due to fear of the SEC could become the biggest direct beneficiaries. Additionally, this could also promote Ethereum staking services, such as spot ETH ETFs providing staking rewards, thereby increasing the price of Ethereum. Below are several potentially representative projects that could directly benefit:
1. XRP: Regulatory clouds dissipate, market performance expected
As an early public chain project, XRP's initial vision was to become the global CBDC settlement layer. However, due to competition and litigation, this solution has not been fully realized. It is currently trying to expand and transform its TOC business by supporting some sidechain projects to introduce smart contract capabilities for Ripple.
Due to business positioning reasons, XRP's data performance in the market is also not very good. However, it has a large user base and fan base, as well as relatively advantageous background resources. The historical accumulation and brand effect of XRP are its biggest highlights and leverage points, still holding considerable potential in a prosperous industry ecosystem. This gives it a significant opportunity in the TOC aspect to easily leverage the market, leading to better market capitalization performance. If XRP can achieve certain results along the TOC route, it will greatly enhance the project's market capitalization and TOB business, and its officials will have ample funds and space to expand the TOB cross-border settlement business.
The rise of XRP following Gensler's resignation is not solely driven by sentiment but is also a response to multiple market expectations. First, XRP may be relisted by more exchanges, expanding its market liquidity, such as Robinhood relisting Ripple (XRP) on November 13. Secondly, Ripple's business operations will focus more on core technologies rather than legal battles. Since the SEC sued it, Ripple has been fully addressing this lawsuit. In the second half of 2023, Ripple's CEO stated that the company had paid over $200 million in legal fees.
Additionally, it is worth noting that several ETF issuers, including 21Shares and Bitwise, have submitted applications to the SEC to launch an XRP spot ETF, further highlighting the market's positive expectations for XRP's future development.
2. ADA: Greater flexibility under the whale effect
Cardano, established in 2017, has always been viewed as an innovative platform driven by technological robustness and academic principles, giving it a sense of stability. It is relatively low-profile but has enormous potential, consistently ranking in the top ten of the cryptocurrency market capitalization list. As an established public chain, Cardano's current ecosystem performs relatively average compared to several well-known public chains in the market, leading many insiders to view it as a 'meme coin.' The significant gap between its market capitalization and project development is related to the concentration of ADA tokens and whale control.
According to statistics from stakingrewards.com, Cardano (ADA) ranks as the fourth cryptocurrency by total value staked, with a total staking value of nearly $21 billion and a staking rate exceeding 61%. This indicates that ADA has undergone centralized lock-up, to some extent controlling the market circulation.
Additionally, according to data from the blockchain analytics platform IntoTheBlock, 72% of ADA holding addresses have not transferred funds for over a year, and currently, as much as 67% of holders are in profit at the current market price. This indicates that the investor base primarily engages in long-term holding. The existence of this 'faith layer' provides stable support for ADA prices and reflects the market's optimistic expectations for its future growth.
Data shows that nearly half of Cardano's circulating supply is controlled by about 400 addresses. This concentration of tokens somewhat undermines market liquidity, making ADA prices more susceptible to large capital inflows. It also reflects the confidence and interest of whales in the rise of ADA prices.
ADA holding addresses
The current cryptocurrency market remains strong, with rising risk appetite among investors, evident sector rotation, and altcoins experiencing a rebound. Although Cardano's ecological performance still needs improvement, as a well-known veteran public chain, its high staking rate and whale holding ratio provide greater elasticity and growth potential for its price.
3. Uniswap: Empowerment acceleration
Uniswap, as the leader in DEX, is one of the few projects in the crypto industry with sustainable high profitability. However, due to long-term regulatory pressure, the issue of empowering the UNI token has remained unresolved. In February of this year, the Uniswap Foundation released a proposal regarding 'launching Uniswap protocol governance,' proposing to proportionally distribute protocol fees to UNI token holders who stake and delegate voting rights. This news quickly ignited market enthusiasm, causing the UNI price to soar from $7 to about $12 overnight. However, as of May, this fee distribution mechanism has yet to be implemented.
In April of this year, the SEC issued a warning to Uniswap Labs, planning to take enforcement action against it. This incident dampened market sentiment, and UNI's market performance became relatively flat. Until October of this year, when Uniswap Labs announced plans to launch the Unichain network, this move injected new imagination into the Uniswap ecosystem and brought the topic of UNI token empowerment back into the market spotlight.
Now, with the resignation of the SEC chair, the market shows high optimism for a more lenient future regulatory environment. Against this backdrop, the alleviation of regulatory pressure will release more potential for decentralized platforms and provide favorable conditions for the expansion of the Uniswap ecosystem, helping the UNI token gradually transform from a single governance token to a core asset with multiple functions, including governance, yield capture, and ecological empowerment. How this transformation will further empower UNI token holders through fee distribution mechanisms and the implementation of Unichain deserves ongoing market attention and expectation.
4. Base: Increased expectations for token issuance
The Ethereum Layer 2 protocol Base, incubated by Coinbase, has been under community attention and anticipation for the issuance of Base tokens since its official launch in August last year. At that time, Coinbase clearly stated that there were no plans to issue tokens. The strategy of not issuing tokens may have helped Coinbase avoid regulatory pitfalls under the ongoing litigation with the SEC. In a recent inquiry about the token issuance plan, although Coinbase's Chief Legal Officer reiterated that there are no plans for token issuance, they also stated that issuing tokens is a feasible option when regulations become clear and that Base does not rule out launching tokens in the future.
It is worth noting that ConsenSys, the parent company of MetaMask, which is also under investigation by the SEC, has been rumored to cancel or postpone its Layer 2 protocol Linea's token plan due to regulatory pressure, sparking market discussion. After Trump's victory, ConsenSys expressed optimism about token issuance in a more lenient regulatory environment and announced at the Devcon conference in Bangkok that it would issue tokens in Q1 next year, indirectly fueling market expectations for Base token issuance.
According to defillama data, Base currently ranks 6th in total value locked (TVL) in DeFi protocols, with total deposits reaching $3.3 billion, second only to ETH and BSC among EVM chains. With the loosening of the regulatory environment and the continuous maturation of the Base chain ecosystem, the future issuance of tokens and the specific design of tokens will be focal points of market attention.
Currently, Trump's 'cabinet formation' is basically complete, and several of the ministers he nominated have expressed support for cryptocurrencies, showing the significant political influence of cryptocurrencies in the U.S. The market's optimistic sentiment is also growing regarding the future development of the crypto industry. 4E, as the official partner of the Argentina national team, supports spot and contract trading for more than 200 crypto assets including Bitcoin, Ethereum, SOL, XRP, ADA, covering various sectors like 'SEC securities tokens', Meme, DeFi, etc., with high liquidity and low rates.
At the same time, 4E has integrated traditional financial assets into the platform, establishing a comprehensive one-stop trading system covering everything from deposits to crypto assets, U.S. stocks, indices, foreign exchange, and bulk gold, with over 600 different risk-level assets, allowing users to invest with a single click using USDT. In addition, the 4E platform has set up a $100 million risk protection fund to provide an additional layer of security for users' funds. With the help of 4E, investors can closely follow market dynamics, flexibly adjust strategies and allocations, and seize every potential opportunity.
