With Trump's election as President of the United States, he promised to replace the SEC chairman on his first day in office. Last week, SEC Chairman Gary Gensler announced he would step down on January 20, 2025, around the time Trump takes office. Following this news, market sentiment in the cryptocurrency space was boosted, leading to a nearly 30% surge in XRP, ADA, and other long-term ‘SEC securities tokens’ that have faced regulatory pressure from the SEC.
During his tenure, he was seen as the number one adversary in the cryptocurrency space.
Since taking office as SEC chairman, Gary Gensler has adopted a strict regulatory attitude towards the cryptocurrency industry. He has repeatedly emphasized that BTC is the only commodity-like currency, while other cryptocurrencies are often viewed as securities. This stance has attracted considerable controversy and criticism. During his tenure, Gensler has taken enforcement actions against multiple entities including Coinbase, Kraken, Robinhood, OpenSea, Uniswap, and MetaMask, completing thousands of enforcement cases and collecting fines of approximately $21 billion, making him the number one adversary in the cryptocurrency space. Previously, attorneys general from 18 U.S. states even jointly filed a lawsuit against the SEC and its five commissioners, accusing the SEC of unconstitutional overreach and unfair suppression of the cryptocurrency industry under Gary Gensler's leadership.
However, despite Gensler's tough stance on cryptocurrencies, he approved spot ETFs for Bitcoin and Ethereum during his tenure, undoubtedly injecting a strong boost into the development of cryptocurrencies. This seemingly contradictory behavior is based on a common logic: incorporating cryptocurrencies into the U.S. regulatory framework, which is also a primary policy direction of the Biden administration.
Easing of SEC securities token pressure.
Gary Gensler's resignation not only relieved many investors and cryptocurrency companies troubled by regulatory pressure but also brought hope to tokens significantly affected by the SEC, most notably the leading Ripple among 'SEC securities tokens'.
As early as December 2020, the SEC began accusing Ripple of illegally issuing unregistered securities. Several platforms, including Coinbase and Robinhood, even temporarily delisted XRP, causing its price to plummet. This officially opened the lawsuit between the SEC and Ripple, attracting widespread attention from the cryptocurrency market. Whether cryptocurrencies are considered securities and subject to SEC regulation has long been a topic of controversy, making the final judgment of this case significantly impactful for the entire cryptocurrency industry's development.
Every time news breaks, XRP experiences huge fluctuations, also affecting the prices of several other altcoins that have been similarly accused of being securities by the SEC, such as ADA, MATIC, SOL, and FIL, making 'SEC securities tokens' a special sector.
Now, with the SEC chairman's departure, Ripple, which has been involved in a lengthy lawsuit with the SEC, has transformed into a 'SEC revenge' concept token, experiencing a rebound, while other tokens like ADA and SOL, which have also faced long-term regulatory pressure from the SEC, have seen similar increases.
Which cryptocurrency companies targeted by the SEC can expect to benefit?
Currently, Trump has not officially announced his preferred candidate for the new SEC chairman, but several popular candidates are friendly towards cryptocurrencies and have publicly expressed support for them. Under a crypto-friendly policy, it is expected that SEC enforcement in the cryptocurrency space will significantly decrease in the future, and some staff within the SEC who have adopted aggressive enforcement may face liquidation.
This means that tokens like Ripple, which were previously suppressed and sued by the SEC, may see lawsuits soften, settle, or even be withdrawn. Projects that have been hesitant to issue tokens or empower tokens due to fear of the SEC may also become the biggest direct beneficiaries. Additionally, it may promote Ethereum staking services, such as spot ETH ETFs being able to provide staking rewards, thereby increasing Ethereum's price. Below are several representative projects that may directly benefit:
1. XRP: Regulatory clouds dissipate, market performance is anticipated.
As an early public chain project, XRP's original vision was to become the global CBDC settlement layer, but due to competition and litigation, the solution has not been truly realized. It is currently attempting to expand and transform its TOC business by supporting some sidechain projects to introduce smart contract functionality for Ripple.
Due to the nature of its business positioning, XRP's data performance in the market has not been very good. However, it has a large user base and fan base, as well as relatively advantageous background resources. XRP's historical accumulation and brand effect are its biggest highlights and leverage points, maintaining considerable potential in a thriving industry ecosystem. This gives it a significant opportunity to easily leverage the market in TOC, improving its market capitalization performance. If XRP can achieve certain results in the TOC route, it will greatly enhance the project's market capitalization and TOB business, and its officials will also have ample funds and space to expand TOB's cross-border settlement business.
This time, Gensler's resignation has led to XRP's rise not only being driven by sentiment but also being a response to multiple market expectations. First, XRP might be re-listed by more exchanges, expanding its market liquidity, such as Robinhood re-listing Ripple (XRP) on November 13. Secondly, Ripple's business operations will become more focused on core technology rather than legal battles. Previously, since the SEC filed a lawsuit against it, Ripple has been fully engaged in 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 noteworthy that several ETF issuers, including 21Shares and Bitwise, have already submitted applications to the SEC for launching an XRP spot ETF, further highlighting the market's positive expectations for XRP's future development.
2. ADA: Greater elasticity under whale effects.
Cardano, as a project born in 2017, has always been viewed as an innovative platform centered on technical robustness and academic drive, giving the impression of being 'stable', relatively low-key but with enormous potential, consistently ranking among the top ten in cryptocurrency market capitalization. As a veteran public chain, Cardano's current ecosystem performs relatively average compared to several well-known public chains on the market, leading many in the community to view it as a 'meme coin'. The significant gap between its market capitalization and project development is closely related to the concentration and whale control of the ADA token.
According to statistics from stakingrewards.com, Cardano (ADA) ranks fourth in total staked value among cryptocurrencies, with a total staked value of nearly $21 billion and a staking rate exceeding 61%. This indicates that ADA has undergone centralized lock-up, controlling market circulation to some extent.
Additionally, according to blockchain analysis 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, indicating that its investor base primarily consists of long-term holders. This 'faith layer' provides stable support for ADA's price and reflects the market's optimistic expectations for its future growth.
From the data, nearly half of Cardano's circulating supply is controlled by about 400 addresses, and this token concentration somewhat diminishes market liquidity, making ADA's price more susceptible to large capital inflows. It also demonstrates the whales' confidence and interest in ADA's price increase.
ADA holding addresses.
The current cryptocurrency market remains strong, and investors' risk appetite is rising, with noticeable sector rotation and altcoins making up for losses. Although Cardano still needs to improve its ecological performance, as a well-known veteran public chain, its high staking rate and whale holding ratio give its price greater elasticity and growth potential.
3. Uniswap: Accelerated empowerment.
As the leader of DEX, Uniswap is one of the few projects in the cryptocurrency industry with sustainable high profitability. However, due to being under long-term regulatory pressure, the empowerment of UNI tokens 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 stakers and delegated voters of UNI token holders. This news quickly ignited market enthusiasm, causing the UNI price to soar from $7 to around $12 overnight. However, as of May, this fee distribution mechanism has still not been implemented.
In April of this year, the SEC issued a warning to Uniswap Labs, planning to take enforcement action against them. This event caused some damage to market sentiment, leading to relatively flat market performance for UNI. It wasn't until October this year that Uniswap Labs announced plans to launch the Unichain, injecting new imaginative space into the Uniswap ecosystem and making the topic of UNI token empowerment once again a market focus.
Now, with the departure of the SEC chairman, the market shows a highly optimistic expectation for a more lenient regulatory environment in the future. In this context, the easing of regulatory pressure releases more potential for decentralized platforms, while also providing favorable conditions for the expansion of the Uniswap ecosystem, helping UNI tokens gradually transform from a single governance token to a core asset with multiple functions such as governance, yield capture, and ecological empowerment. How this transformation will further empower UNI token holders through fee distribution mechanisms and the implementation of Unichain is worth the market's continued attention and expectation.
4. Base: Expectations for token issuance increase.
The Ethereum Layer 2 protocol Base, incubated by Coinbase, has been closely watched by community members since its official launch last August, with expectations for the issuance of Base tokens. At that time, Coinbase clearly stated that there were no plans to issue tokens. Due to the ongoing lawsuit between Coinbase and the SEC, the decision not to issue tokens may have helped Coinbase avoid regulatory pitfalls under litigation pressure. However, during a recent inquiry from the community about the token issuance plan, Coinbase's Chief Legal Officer reiterated that there are no plans to issue tokens but stated that issuing tokens would be a viable option when regulations are clarified in the future, and noted that Base does not rule out launching a token in the future.
It is worth noting that ConsenSys, the parent company of MetaMask, which is also under SEC investigation, was earlier rumored to be canceling or postponing its Layer 2 protocol Linea's token plans due to regulatory pressure, sparking market discussion. After Trump's victory, ConsenSys expressed optimism about token issuance under a more relaxed regulatory environment and announced at the Devcon conference held in Bangkok that it would issue tokens in Q1 of next year, indirectly fueling market expectations for Base token issuance.
According to defillama data, Base currently ranks sixth in Total Value Locked (TVL) in DeFi protocols, with total deposits reaching $3.3 billion, second only to ETH and BSC among EVM chains. As the regulatory environment loosens and the Base chain ecosystem matures, whether to issue tokens in the future and the specific design of the tokens will be the focus of market attention.
Currently, Trump's 'cabinet formation' is nearly complete, and many of the ministers he nominated have made supportive statements about cryptocurrencies, indicating the significant political influence of cryptocurrencies in the U.S. Market sentiment regarding the future development of the cryptocurrency industry is also increasingly optimistic. As the official partner of the Argentine national team, 4E supports spot and contract trading of over 200 cryptocurrencies, including Bitcoin, Ethereum, SOL, XRP, and ADA, covering various sectors such as 'SEC securities tokens', meme coins, and DeFi, offering high liquidity and low fees.
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