Cycle Capital: US election - a continuing meme theme in 2024?

Author: Cycle Capital

Since the start of the US election, a series of election-related meme tokens have emerged. After the Trump campaign team publicly supported cryptocurrency donations, TRUMP was the main representative, with a market value of $775 million at its peak. Due to Biden's more conservative attitude towards cryptocurrencies, the market attention to his related tokens is relatively low. After Trump was convicted of the hush money case, the price of Trump-related tokens fell, while Biden-related meme tokens rose. During the election, who will become the president of the United States and public remarks on crypto attitudes affect the price trend of related tokens.

Candidates' Attitudes towards Cryptocurrencies

Trump

Trump reversed his previous anti-crypto attitude in this campaign and issued a series of crypto-friendly remarks, including "ensuring that the future of the crypto industry and Bitcoin happens in the United States, and will guarantee the self-custody rights of wallets for 50 million cryptocurrency holders across the United States", and promised to pardon the founder of Silk Road after being elected.

The change in his attitude towards crypto is not without trace. At the end of 22, Trump announced the release of limited edition Trump digital trading card NFT on truth social, and issued "Win Trump Prizes" NFT on Polygon in 2023. The rights include dinner with Trump, autographed souvenirs, 1v1 meetings, etc.

In May 2024, the Trump campaign team explicitly accepted cryptocurrency donations as campaign funds, formally confirming its crypto-friendly attitude.

Biden

Biden's latest attitude towards cryptocurrency is reflected in the veto of the bill to overturn SEC SAB 121. The core content of SAB 121 is that companies that hold cryptocurrencies are required to record the cryptocurrencies held by customers as liabilities on their balance sheets. This content has always been considered too harsh, hindering custodians or companies from holding cryptocurrencies on behalf of customers. Biden stated in his veto letter that "overturning SAB 121 will weaken the SEC's power in accounting matters" and "his government will not support measures that harm consumers and consumer welfare."

Therefore, compared with Trump, Biden's attitude towards cryptocurrency is more conservative. The next opportunity for Biden to express his views on cryptocurrencies will be the FIT 21 Act, which mainly provides a regulatory framework for digital assets and allocates jurisdiction over digital assets between the Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC") based on whether the relevant blockchain is "functional", "non-functional" or "decentralized". The bill has passed the House of Representatives and still needs to be voted on by the Senate and signed by the President to become formal law.

SEC's attitude towards crypto regulation

During Trump's tenure from 2016 to 2020, Trump was crypto-averse and the chairman of the SEC was Jay Clayton. Jay Clayton is cautious about cryptocurrencies and mainly cracks down on fraudulent ICO activities and crypto exchange platforms. The most typical cases are against Block.one, Ripple Labs and Telegram (against Ton), and other cases are more about individuals or companies illegally issuing tokens.

Biden appointed Gary Gensler as SEC Chairman in April 2021. Gary Gensler once stated that he was a "bitcoin centrist minimalist", so in the early days of Gensler's tenure, the crypto industry speculated that his appointment as SEC chairman would be beneficial to the development of crypto. However, Gensler and Clayton are both cautious about non-bitcoin cryptocurrencies, believing that "all tokens are securities." This statement seems to have loosened on June 5, 2024, but there is no clear crypto-friendliness. During Gensler's tenure, the SEC's cases against crypto far exceeded those during Clayton's tenure, and the number of cases against exchanges increased significantly. The exchanges prosecuted include Poloniex, Coinbase, Bittrex, Binance, and Kraken. Judging from the number of cases prosecuted by the SEC against crypto and the objects of prosecution, Biden's attitude towards crypto during his administration was more conservative.

Note: From June 6, 2023 to December 31, 2023, the SEC had 14 cases against crypto, and from January 1, 2024 to June 10, 2024, there were 6 cases against crypto that year.

Campaign process

Key time points of the campaign

July 15 to July 18, the Republican National Convention will decide the Republican candidate and platform. Trump has already been nominated as a Republican candidate.

August 19 to August 22, the Democratic National Convention will decide the Democratic candidate and platform. The candidate is confirmed to be Biden.

On June 27 and September 10, Biden and Trump debated, which may have a significant impact on the final election results.

November 5, the day of the presidential election.

Key events: The impact of the hush money case

Trump was found guilty of all 34 charges in the "hush money" criminal case. The judge will pronounce the verdict on July 11, which may theoretically include imprisonment and a huge fine. Trump plans to still appeal the "hush money" case. Even if the hush money case is convicted, it does not legally affect Trump's continued campaign for the US presidency.

A survey by Ipsos and ABC News in April also showed that 16% of Trump supporters would reconsider their votes if Trump was convicted. According to data from racetotheWH tracking the latest poll results, there are currently 8.8% of uncertain votes, and Trump's support rate is temporarily leading. If Trump is convicted and sentenced, the number of uncertain votes will increase to 17%, and Biden's support rate will be higher than Trump.

The conviction of the hush money case has promoted Trump's donations. In April, the fundraising amount was about $76 million, exceeding Biden's $51 million. In the disclosure of the Trump team in May, the funds raised by the team exceeded $400 million, mainly due to small donations, with an average donation amount of about $70. According to federal regulations, the specific amount will be announced at the end of June. It should be noted that in the early stage of the 2020 campaign, the Trump team's campaign funds were also very strong, but in the later stage of the campaign, the financial situation of the Biden team was better. Strong campaign funds can bring some advantages, but they cannot guarantee the final election results.

The importance of cryptocurrency in the general election (is it hyped up?)

A poll released by Paradigm on March 14 showed that 19% of registered U.S. voters had purchased cryptocurrency, concluding that "a fifth of the country's population is not a niche group." Cryptocurrency holders are willing to switch parties.

Swing states are the core battlegrounds of the campaign. According to the polls, the main swing states this year are Arizona, Georgia, Michigan, Pennsylvania and Wisconsin, and potential swing states are Nevada, North Carolina and Minnesota.

According to a DGC survey in Michigan, Nevada, Ohio, Montana, Pennsylvania and Arizona in May, 26% of respondents said they were concerned about the candidates' stance on cryptocurrencies, and 21% said cryptocurrencies were an important issue to consider during the election. 55% of people are worried that policymakers will stifle innovation through excessive regulation, so the next president needs to be crypto-friendly.

According to a poll released by CBS News on April 29, voters in the three major swing states in the "Rust Belt" (Pennsylvania, Ohio and Michigan) are most concerned about economic issues, mainly growth and inflation. Since Biden took office in the first quarter of 2021, the U.S. GDP has grown by more than 8% after deducting inflation, but the economic growth of the three "swing states" mentioned above lags far behind the national average, especially Wisconsin, where GDP has only grown by 3.1% in nearly four years.

If you want to win votes in swing states, economic issues are still the core, and it is not ruled out that candidates will mention cryptocurrency again to win young votes.

Meme tokens related to the US election theme

As the corresponding meme tokens for the election theme, the price fluctuations are large, involving more risks, including but not limited to: changes in the encryption attitudes of candidates and changes in campaign slogans, and the low probability of tokens being listed on exchanges. The content of this article is for reference only and does not constitute investment advice.