The 2024 U.S. presidential election is undoubtedly one of the most talked-about elections in recent years. Despite a tense pre-election atmosphere, Trump won the presidency by a landslide, and the Republican Party secured a majority in both the House and Senate. This result marks the beginning of a new political cycle in the U.S., with the cryptocurrency market being a direct beneficiary of this change.
Why is the 12 months post-election considered the "golden period" for the crypto market? Historical data shows that the 12 months following the U.S. election are often a key window for strong increases in crypto assets, especially altcoins, which repeatedly outperform the market. Given the current policy environment, this time, the opportunity may be even clearer.
The crypto industry is迎来"policy inflection point"
This election introduces the "crypto agenda" for the first time, and Trump and his team have an open attitude towards cryptocurrency. Several important policy changes after the election have injected a strong boost to the market:
1. Major changes in SEC policy
Under the leadership of the Biden administration, the SEC has implemented aggressive regulation of cryptocurrency, with over 2,700 enforcement actions during Chairman Gary Gensler's tenure causing significant challenges for the entire industry. However, Trump has clearly stated that he will adjust the SEC leadership, and last week, Gensler announced he would resign in January 2025. It is reported that most of his successors are crypto-friendly, which means the previous approach of 'regulating through enforcement' will be replaced, potentially leading the industry to a more transparent guidance framework.
2. Congress is more supportive of cryptocurrency
With the Republican Party fully in control of Congress, nearly two-thirds of lawmakers are seen as crypto-friendly. The passage rate of crypto-related bills is expected to significantly increase in the coming year, clearing obstacles for institutional capital to enter the crypto market and providing more policy support for innovative projects.
3. The U.S. may establish a "strategic Bitcoin reserve"
During his campaign, Trump proposed establishing a strategic Bitcoin reserve and halting the sale of government-held Bitcoin. This plan is currently moving forward rapidly, and the market is beginning to speculate whether the U.S. government will become a net buyer of Bitcoin. Such massive purchasing power could not only drive up the price of Bitcoin but also prompt other countries around the world to follow suit.
4. Policy support for DeFi
World Liberty Financial (WLF), a decentralized lending project supported by Trump, has currently raised over $50 million and plans to expand to $300 million. This DeFi project backed by a future U.S. president will have profound impacts on the industry and greatly boost the confidence of DeFi developers and innovators.
History proves: The 12 months following the election are the golden period of the crypto bull market
Data tells us that in the 12 months following the U.S. presidential election, crypto assets often perform remarkably well:
1. Strong price trends: Regardless of which party wins, crypto assets always perform exceptionally well within 12 months of the election. This trend is driven by the market confidence resulting from the election outcome and overlaps with Bitcoin's halving cycles.
2. Altcoins have significant advantages: In the 12 months following the last two elections, the increase in altcoins (such as ETH) was about three times that of Bitcoin. For example, after the 2020 election, Ethereum rose by 370%, while Bitcoin only increased by 120%. As of 30 days after the 2024 election, Bitcoin is up 46% and Ethereum is up 58%, showing signs of an altcoin season.
Why is altcoin season worth looking forward to?
The emergence of "altcoin season" is often related to a shift in risk appetite and changes in market structure. The following points are worth noting:
1. Market sentiment shifts towards risk appetite
The optimism following the election and favorable policies have attracted more retail investors. Retail funds tend to prefer less liquid altcoins, which often leads to altcoins outperforming mainstream coins in the short term.
2. Guidance from historical cycles
From 2017 to 2021, altcoin season often overlapped with the later stages of a bull market, outperforming Bitcoin. For example:
The 2017 altcoin season, represented by ETH, saw an increase of up to 2700%;
In 2021's altcoin season, SOL, MATIC, and others all saw increases exceeding 2000%.
History may repeat itself in 2024, and we are at the beginning of a new round of "altcoin season."
3. High return potential of small coins
Currently, the market is very interested in medium and small market cap tokens with higher risk. Some small coins that have not yet been noticed by mainstream capital may explode during "altcoin season," bringing tenfold or even hundredfold returns.
Future layout: Opportunities in altcoins should not be missed
In the current market environment, how can we seize the opportunity of "altcoin season"? Here are a few suggestions:
1. Pay attention to tokens related to policy dividends:
For example, tokens related to strategic Bitcoin reserves (BTC, ETH, etc.).
Decentralized finance (DeFi) tokens, such as AAVE, COMP.
2. Prefer medium and small market cap tokens:
Focus primarily on tokens with a market cap below $1 billion, especially small coins with innovative technology and community support.
3. Build positions in batches to control risk:
Although altcoins have high returns, they are also highly volatile. It is advisable to build positions in batches to avoid a single large investment. The Musk-themed small dog token 𝙋𝙪𝙥𝙥𝙞𝙚𝙨 has 16,000 holders, with a market cap of less than 100 million, showing decent potential.
