Analysis of the Impact of the 2024 U.S. Election on the Encryption Industry

Since its inception, Bitcoin has gone through three election cycles and has become one of the key issues in the 2024 U.S. presidential election. As the concept of Bitcoin gains popularity, its supporters have formed a significant voter group in U.S. politics. Multiple factors have contributed to the increasing importance of encryption in elections, including the erosion of real wages due to inflation, challenges to the global status of the dollar, growing interest among American voters in encryption, and the current government's regulatory stance towards the encryption industry.

Cryptocurrency Becomes an Important Election Topic Background

The significance of Bitcoin to the United States

Hedge against inflation demand strengthening

Since the financial crisis in 2008, Bitcoin has been seen as a potential tool to combat inflation and economic uncertainty, particularly providing hope for the middle class to achieve economic independence. The decentralization and limited supply of Bitcoin make it an alternative asset under government and central bank intervention.

Regardless of whether Trump or Harris wins, U.S. fiscal policy may lead to a larger budget deficit. Over the past 25 years, the ratio of U.S. federal debt to GDP has sharply risen from 40% to 100%, and it may further climb in the future. There are limited ways to address high debt, and diluting debt through inflation may become a choice for the government.

Strengthen the international influence of the US dollar

Stablecoins have become the focus of policy discussions, with the U.S. Congress reviewing several related bills. Stablecoins help to continue reinforcing the international influence of the dollar in the face of challenges to its status as the global reserve currency. Currently, over 99% of stablecoins are denominated in dollars.

Voter interest in encryption is rising.

Surveys show that about half of potential American voters are more inclined to support candidates who have a positive attitude towards encryption. Key swing state voters are also showing a significant increase in their attention to encryption.

The Biden administration's regulatory attitude towards encryption companies.

The Biden administration has strengthened regulation of encryption currencies since taking office, implementing a series of measures including filing lawsuits against large encryption companies.

encryption plays a key role in corporate donations

In 2024, cryptocurrency companies have become one of the main forces in political donations in the United States. Coinbase and Ripple are the largest corporate political donors this year, accounting for nearly 48% of total corporate donations.

The Impact of the Election

The policy proposals of both candidates

Harris

Harris's statements on cryptocurrency policy are relatively limited, promising to develop an encryption regulatory framework to protect investors. The current Biden/Harris administration's regulatory stance on the cryptocurrency industry is relatively confrontational.

Trump

Trump has shown a strong interest in the digital asset industry, pledging to make the United States "the global capital of cryptocurrency and Bitcoin." He has proposed a series of cryptocurrency policy suggestions, including establishing a Bitcoin government reserve and forming a cryptocurrency advisory committee.

"The possibility of a divided government"

At present, it seems very likely that a "divided government" situation will emerge, which could lead to a policy deadlock. If the Republican Party wins fully, there is hope for new legislation to be passed in the short term, which would be beneficial for the encryption currency market.

The SEC leadership is likely to be replaced.

Regardless of whether Harris or Trump wins, there may be significant changes in the leadership of the SEC.

Macro liquidity impact

Trump promised that if he is elected again, he will significantly lower interest rates, which could drive up Bitcoin and other encryption assets.

The Impact of Elections on Encryption Startups

The development of Web3 prediction markets

Prediction market platforms like Polymarket performed outstandingly in the 2024 election, demonstrating the competitiveness of Web3 applications in traditional fields.

encryption currency companies in the US incubate listing prospects

Trump's victory may bring a clearer regulatory framework and a looser environment, which would be beneficial for encryption companies to develop and go public in the United States.

The development of DeFi and BTCFi

The Trump administration may accelerate the development of DeFi and BTCFi. BTCFi is expected to gain more support, and its total scale is projected to grow significantly.

With the technological upgrades and innovations in Bitcoin, such as the potential implementation of OP_CAT, new development opportunities will arise for BTCFi. Multiple projects have begun developing around these technologies in preparation for the expansion of the BTCFi ecosystem.