Coin World News:
With the approaching of the US presidential election, Bitcoin and cryptocurrencies have become a key political topic in an unprecedented way. This can be attributed to the relative youth of the industry, as Bitcoin has been running for 11 years by the 2020 election, Ethereum for only 5 years, and many key DeFi protocols for only two to three years (for example, Maker was launched as a working product in 2017, and Uniswap and Compound were launched in 2018).
But fast forward to 2024, the situation is rapidly changing, as spot BTC ETFs operated by BlackRock and Vanguard (among other companies) are now part of the TradFi landscape, and a spot ETH ETF is set to launch later this summer, according to a recent report that states 40% of Americans now hold cryptocurrencies.
Data from Security.org
This time, cryptocurrencies have become too big to ignore, and Wall Street, regardless of politics, has put Bitcoin on the menu. What’s more, the US Securities and Exchange Commission (SEC), which has been hostile to cryptocurrencies, has forced industry leaders into a situation where resistance has become a matter of survival. This increasingly means aligning with political candidates who support cryptocurrencies and influencing them.
After all, if legal battles with the SEC become the norm for cryptocurrency companies and the SEC receives support from the Biden administration, it is unlikely that the cryptocurrency industry will accept more of the same.
Of course, staying aligned with alternative candidates who support cryptocurrencies requires having such candidates. This, in turn, could motivate candidates to develop cryptocurrency-friendly policies. If we look at the Trump camp and the support he received from within the cryptocurrency industry, we can see this dynamic at play.
Kraken founder donates to Trump
At the end of June, Jesse Powell, founder of major cryptocurrency exchange Kraken, posted on Twitter that he personally donated $1 million to Donald Trump, with the majority being in ETH. Powell described Trump as “the only major party candidate supporting cryptocurrencies in the 2024 presidential election” and directly stated that the cryptocurrency industry has been under attack by individuals like Elizabeth Warren and Gary Gensler, while claiming that the Biden administration has stood by, allowing unchecked regulation through enforcement.
“I just personally donated $1 million to @realDonaldTrump (mostly #ETH). The crypto industry has been under attack by people like Elizabeth Warren and Gary Gensler. Despite overwhelming bipartisan efforts in Congress to write clear rules, the Biden White House just stands by… pic.twitter.com/Ksxf3P2oCb” – Jesse Powell (@jespow) June 28, 2024
Powell’s post explicitly blames the Democratic government and the SEC, with the noteworthy ending hashtag “#freeross.” This refers to Ross Ulbricht, who in 2015 was sentenced to two life terms plus 40 years without parole for creating and operating the online black market Silk Road, which facilitated drug transactions primarily paid for with BTC. This is relevant to Powell’s post because last month, Trump promised to commute Ulbricht’s sentence if elected, indicating an awareness that the imprisonment of Silk Road operator is a major concern for long-time Bitcoin users who believe the punishment for Ulbricht was too severe.
Other cryptocurrency and business leaders support Trump
Jesse Powell is not the only prominent cryptocurrency figure openly supporting Trump. Gemini founders Tyler and Cameron Winklevoss, as well as ARK Invest founder and CEO Cathie Wood, have also shown their support. Wood stated, “Economically, I’m a voter, and on that basis, I’m for Trump.”
In June of this year, Trump also held a fundraising event at the San Francisco residence of tech entrepreneur David Sacks. At the end of last month, hedge fund manager Bill Ackman published an article that appeared to indirectly support Trump or at least urge effective work for Trump’s victory, stating, “The nation should rally around Trump and help him succeed” because Trump “will win with overwhelming force.”
“@realDonaldTrump will win with overwhelming force. The nation should rally around Trump and help him succeed. When Trump was first elected, no one thought he would win. As a result, he was completely unprepared. Poorly prepared, the investigation into Russia, and the ensuing…” – Bill Ackman (@BillAckman) June 28, 2024
Furthermore, David Bailey, CEO of Bitcoin Magazine, publicly stated as early as May that his organization is “working with the Trump campaign to help shape their Bitcoin and cryptocurrency policy agenda.” This announcement came shortly before Trump’s campaign began accepting cryptocurrency donations and before Trump gained praise for his promise to support US Bitcoin mining.
Is the SOL ETF application a bet on Trump?
Last month, both VanEck and 21Shares submitted applications for a SOL spot ETF. While similar products for BTC and ETH have already been approved, with the Solana fund further developing along the altcoin risk curve, it seems like a long shot, especially since there is currently no Solana futures market.
Therefore, some observers interpret these applications as a bet on the incoming President Trump, who will make favorable changes for cryptocurrencies at the US Securities and Exchange Commission. As a result, speculations arise about who might take over the position of Chairman of the SEC in this scenario, with Dan Gallagher being a popular name highly regarded by the media. Gallagher is currently the CLO of the trading and investment platform Robinhood, as well as a former SEC commissioner, and is expected to have an open attitude towards cryptocurrencies.
Speculations about appointments are currently just that, speculations, but the expectation of changes at the SEC under new leadership is very real. Moreover, last month, the Supreme Court overturned the Chevron doctrine, which is expected to shift power (related to interpreting congressional acts) from regulatory agencies back to the courts, potentially limiting the SEC’s rule by enforcement as critics have argued.
However, what is certain at the moment is that the cryptocurrency industry, which has repeatedly expressed dissatisfaction with US regulatory agencies, now sees an opportunity in the upcoming election.