Título original: A vitória republicana inaugura uma nova era para a criptografia
Autor original: Kelvin Koh, Grupo Spartan
Compilação original: Como está o marido do Odaily Planet Daily?
A eleição presidencial dos EUA de 2024 tornou-se uma das eleições mais assistidas dos últimos anos. Embora a maioria das pessoas esperasse que as eleições fossem acirradas, os resultados surpreenderam a muitos. Não só Trump venceu de forma convincente as eleições presidenciais, mas os republicanos também garantiram maiorias no Senado e na Câmara dos Representantes. Uma vitória tão esmagadora daria aos republicanos influência política suficiente para pressionar por múltiplas mudanças nos próximos anos. Espera-se que o espaço das criptomoedas passe por grandes mudanças e acreditamos que os próximos 12 meses serão um período positivo para os ativos criptográficos.
One difference in the 2024 election is the emergence of a 'crypto agenda,' with the winning president and their core advisory team holding a friendly attitude towards cryptocurrencies. Cryptocurrency companies have strongly supported Trump and key Republican candidates through donations. Thus, it is not surprising that the crypto industry has become one of the main beneficiaries of this Republican success.
There has been much discussion about the significance of this election for the crypto industry, but here are a few major impacts:
Changes in SEC policy. Under Gary Gensler's leadership, the SEC and other appointed officials in the Biden administration have implemented aggressive regulations on the crypto industry. Despite repeated calls from the industry for regulatory guidance, the SEC insists on managing through enforcement actions. During Gensler's tenure, over 2,700 enforcement actions have been initiated, resulting in fines totaling $21 billion. This has made it difficult for many projects to operate in the U.S. Trump explicitly stated during his campaign that if elected, he would replace Gensler. As expected, last week Gensler announced he would resign as SEC Chair on January 20, 2025. Several candidates have already been nominated to succeed him, and they are generally seen as more supportive of the crypto industry. This means existing enforcement actions may be revoked, and the SEC will adopt a more collaborative regulatory approach.
Improvement in the congressional environment. In the past, a major challenge for the crypto industry was the difficulty of passing any favorable legislation in the U.S. Congress, as most lawmakers lacked understanding of cryptocurrencies. However, after this election, about two-thirds of Congress members are considered pro-crypto. This could lead to a supportive regulatory framework for innovation, making it easier for projects to secure funding and clearing barriers for institutional capital to enter the crypto space.
Proposal for strategic Bitcoin reserves. During the campaign, Trump indicated to his crypto supporters that if elected, he would push for the establishment of strategic Bitcoin reserves rather than allowing the U.S. government to continue disposing of previously seized Bitcoins. This proposal quickly gained attention after the election. If realized, the market would begin to speculate whether this means the U.S. government will become a net buyer of Bitcoin rather than a seller. If MicroStrategy alone can influence Bitcoin prices, imagine the impact of the U.S. government establishing strategic Bitcoin reserves. More importantly, how will other countries respond? Will they propose similar plans?
Support for DeFi. Even before the election, a team backed by Trump launched World Liberty Financial in September 2024, aimed at providing decentralized lending services and governance through the native token WLF. The project has raised over $50 million to date, with the latest investment coming from crypto entrepreneur Justin Sun, who invested $30 million this week. WLF plans to raise a total of $300 million. Regardless of whether it ultimately raises $300 million or $50 million, the significance of this project far exceeds its amount—it provides tremendous encouragement to DeFi developers and innovators. More importantly, this DeFi project supported by the incoming U.S. president will have a profound impact on the entire industry.
Each of the events mentioned above is significant enough to have a substantial impact on the crypto market, and the combination of these events will have an even more far-reaching effect on the crypto industry. The market has not yet fully reflected the potential impacts of these changes, which is why U.S. media refers to this period as 'the golden age of crypto.'
In addition to all the above, Trump has also expressed a desire to make the U.S. 'the global crypto capital.' To some extent, the U.S. is already the de facto leader in crypto. Many major infrastructure projects, some of the largest blockchain infrastructure companies, and decentralized applications originated in the U.S. The U.S. also hosts the world's largest licensed cryptocurrency exchange, the largest crypto investment bank, and the largest Web3 venture capital pool. Moreover, the U.S. accounts for about 40% of the global Bitcoin mining hash rate (compared to 17% in 2021), making it the largest center for Bitcoin mining, partly due to policy changes in China. Most global crypto trades are also denominated in U.S. dollars, and major stablecoins are pegged to the dollar. Therefore, in many ways, the U.S. is already the global crypto hub. However, if the U.S. government plans to solidify or further expand its dominance, what does this mean for the governments of other countries, especially major financial centers like London, Tokyo, Dubai, and Hong Kong? More importantly, can Europe afford to miss out on the Web3 innovation era, falling behind once again after the Web2 era?
Some may question whether Trump will truly fulfill these promises, but I believe the likelihood is high. Trump does not follow traditional rules, and the political leverage gained from this election victory is quite powerful. Additionally, Trump has two crypto-native advisors—Elon Musk and JD Vance. The new Secretary of Commerce, Howard Lutnick, also serves as Chairman and CEO of Cantor Fitzgerald, which just acquired 5% of Tether (the issuer of the world's largest stablecoin, USDT). Combined with a more crypto-friendly Congress, pushing these measures should not be difficult.
Historical data: Cryptocurrency prices have performed strongly in the 12 months following U.S. elections, with altcoins outperforming Bitcoin.
In this context, discussing the impact of all this on crypto asset prices becomes particularly important. From the table below, it can be seen that historically, the 12 months following U.S. elections are usually a strong period for crypto asset prices.
Here are two main observations:
Regardless of who wins the presidential election and what the interest rate environment is, crypto assets have performed exceptionally well in the 12 months following U.S. elections. We attribute this to two factors: a) the clarity brought by the election results and the optimism towards the new government; b) the ongoing driving force of the Bitcoin halving cycle/crypto cycle.
In the 12 months following the last two elections, altcoins (represented by ETH) returned about 3 times that of Bitcoin.
As of 30 days after the 2024 election, Bitcoin has risen by 46%, and Ethereum has risen by 58%. We believe there is still significant upside potential in the next 11 months.
To better understand the opportunities in altcoins, let’s look at the chart below, which shows the performance of altcoins relative to Bitcoin. It can be seen that there are stages within the cycle where altcoins significantly outperform Bitcoin. We refer to these stages as 'altcoin cycles' or 'altcoin seasons.' The last major altcoin cycle occurred in January 2021 and peaked in November 2021. The previous cycle began in February 2017 and peaked in January 2018.
Notably, these altcoin cycles roughly overlap with the 12-month period following elections. We believe the main reason is the strong price performance in the initial weeks after the election and the shift in investor sentiment toward risk appetite. Additionally, this trend has attracted retail funds into the crypto asset class, as retail funds often prefer higher-risk small and mid-cap tokens, as they are not subject to the liquidity constraints of institutional investors. Furthermore, during this time in the cycle, altcoins often perform poorly, making their risk-reward ratio more attractive compared to large-cap tokens. This is also the case in the current cycle.
If this historical relationship holds, we should expect the altcoin season to begin soon.
