As the U.S. election approaches, will the crypto industry usher in a policy spring

The cryptocurrency industry is gradually impacting the lives of American people and business investments, and it is beginning to emerge in the 2024 U.S. election as one of the new political forces that cannot be ignored.

According to Coinbase, over 20% of American adults are currently or have previously held cryptocurrency. The Federal Reserve's 《Economic Well-Being of U.S. Households in 2023》indicates that in 2023, more than 7% of American adults still hold cryptocurrency.

The financial industry is also accelerating its embrace of cryptocurrency in 2024. On January 11, multiple spot Bitcoin ETFs were launched in the U.S., with BlackRock's spot Bitcoin ETF, "IBIT," surpassing $10 billion in assets in just seven weeks, becoming the fastest ETF to reach this milestone. Since MicroStrategy announced its Bitcoin holding strategy in August 2020, it has achieved significant commercial success, with its stock price outperforming other S&P 500 constituents during the same period. ASIC company ICG announced a dollar-cost averaging strategy for accumulating Ethereum in Q1 2024. In December 2024, Microsoft's shareholder meeting will vote on whether to proceed with Bitcoin investments, and the investment decisions of leading tech companies could have a profound impact on other firms.

During 2024 U.S. presidential election cycle, the cryptocurrency industry has rapidly emerged as an influential political group. According to a report by Public Citizen, cryptocurrency companies have spent over $119 million on the 2024 U.S. elections, accounting for 43.5% of all corporate donations.

From January 2023 to September 2024, the pro-cryptocurrency political action committee Fairshake received a total of $204 million in donations, with cryptocurrency exchange Coinbase contributing $45.5 million and Ripple donating $45 million. Although Fairshake does not have a clear partisan bias, in September 2024, out of its $20 million in expenditures, $15 million supported the Republican-leaning "Defend American Jobs" PAC, while $5 million backed the Democratic-leaning "Protect Progress" PAC

As the election results approach, pro-cryptocurrency Trump has seen an increase in his chances of winning, and the price of Bitcoin has steadily risen, nearing its pre-March 2024 highs. If Trump wins the presidency, the U.S. cryptocurrency industry may experience accelerated growth under a more favorable regulatory environment.

Reflecting on Trump's attitude toward cryptocurrency, his position has undergone a significant shift. During his presidency from 2017 to 2021, Trump was clearly opposed to cryptocurrency, even publicly criticizing it on social media in 2019.

Since 2021, the rapid rise of the NFT market, with numerous celebrities launching their own NFTs, has influenced Trump's and his family's attitude toward the cryptocurrency industry. At the end of 2021, First Lady Melania Trump announced the launch of the Melania Trump NFT platform, introducing her first NFT, "Melania's Vision." The successful release of Melania's NFT positively impacted Trump's stance on cryptocurrency. By the end of 2022, Trump released his first NFT, "Trump Digital Trading Cards," with 45,000 cards priced at $99 each selling out in just 16 hours, marking a significant success. Consequently, Trump launched a second and third series of NFTs in 2023, both generating millions in sales. In August 2024, as part of his campaign fundraising and influence-boosting efforts, Trump released a fourth series of NFTs titled "The America First Collect," which accumulated $2.2 million in sales.

According to Arkham, as of March 2024, Trump holds 340.531 ETH, 368.342 wETH, and 579,281 TRUMP tokens. Republican vice-presidential candidate JD Vance has also invested in ETH, ENS, and various NFTs. Throughout the election period, Trump has demonstrated a very friendly attitude toward the cryptocurrency industry, even becoming the first major party presidential candidate in U.S. history to accept donations in digital currency. In October, the Trump family launched a decentralized finance (DeFi) project, World Liberty Financial ($WLFI), further increasing their activity in the cryptocurrency sector.

At the 2024 Bitcoin Conference held in Nashville, Trump reiterated the urgency of making the U.S. the capital of cryptocurrency and proposed a series of policies to support the development of the cryptocurrency industry in America, including:

1、Regulation: Build a more crypto-friendly policy environment, diminish the SEC's regulatory power, and consider replacing SEC Chair Gary Gensler with someone more favorable to cryptocurrency. He proposed the establishment of a presidential advisory committee for the crypto industry. Republican vice-presidential candidate JD Vance has also expressed dissatisfaction with the SEC and Gensler's regulatory policies on multiple occasions.

2、Stablecoins: Introduce a clearer framework for supporting and regulating stablecoins to enhance the competitiveness of dollar-pegged stablecoins. He pledged that the U.S. government would not launch a CBDC during his administration.

3、Bitcoin Reserves: Promote U.S. government ownership of 100% of current and future Bitcoin acquisitions, making Bitcoin one of the nation's strategic reserves.

4、Mining: Encourage Bitcoin mining, minting, and manufacturing in the U.S., aiming to make the country a global leader in Bitcoin mining and promising increased power resources for Bitcoin miners. Previously, Trump held discussions at Mar-a-Lago with representatives from several Bitcoin mining companies in what was described as a "presidential-level roundtable on Bitcoin mining," with executives from companies like CleanSpark, Riot Platforms, and Marathon Digital in attendance.

5、Custody: Defend the right to self-custody of Bitcoin, emphasizing personal property rights and decentralization.

Overall, the Republican Party has a generally positive attitude toward cryptocurrency, advocating for reduced regulation and supporting innovation. They have even included a clear endorsement of the cryptocurrency industry in 《2024 GOP Platform：Make America Great Again》, largely continuing the policy agenda outlined by Trump at the 2024 Bitcoin Conference.

The Democratic Party's stance on cryptocurrency leans toward prudential regulation, gradually shifting to a more neutral position in recent years. In March 2022, President Biden signed the《Executive Order on Ensuring Responsible Development of Digital Assets》, marking the first official regulatory framework proposal for the cryptocurrency industry by the U.S. government. Subsequently, the SEC took enforcement actions against crypto companies like Binance, Kraken, Coinbase, and Ripple. Democratic presidential candidate Kamala Harris has not expressed a clear stance on cryptocurrency, only noting that "remain dominant in AI and quantum computing, blockchain and other emerging technologies" and supporting a regulatory framework for cryptocurrency. In September 2024, Coinbase's CFO stated that Future Forward, a PAC supporting Harris, joined Coinbase Commerce and now accepts crypto donations.

The Democratic Party's cautious approach to crypto has led some Silicon Valley investors, including a16z co-founder Marc Andreessen, to shift their support from the Democratic Party to the Republican Party.

If Trump wins the 2024 presidential election, the cryptocurrency industry can expect a period of policy support across regulation, mining, self-custody, reserves, stablecoins, and application innovation. If Harris wins, given the growing influence of the crypto community in U.S. politics, the Democratic Party's policy stance is also anticipated to be more lenient than during Biden's administration.

Next week, the cryptocurrency sector faces two key events: the outcome of the U.S. election and the Federal Reserve's November interest rate decision. Whether the industry will enter an accelerated growth phase in the short term remains to be seen.

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