Trump and Biden launch the "Crypto Election" battle

Author: Tuo Luo Finance

Starting this year, people around the world have been paying attention to the U.S. presidential election.

On one hand, against the backdrop of increasing political polarization, persistent economic recession, and severe social division, the choice of the next U.S. president will have a crucial impact on the direction of the country's political situation. On the other hand, with high inflation, escalating trade wars, and the collective development of economies, the future of the global economy also hinges on the U.S. election.

On November 5, 2024, the U.S. presidential election will be held as scheduled. From the current situation, barring any surprises, this year's U.S. president will be chosen between the 81-year-old Democratic representative Biden and the Republican representative Trump, known for his outrageous statements. To secure votes, both will campaign vigorously, delivering speeches to articulate their political intentions and electoral promises, covering issues such as the economy, demographics, gender, education, and military.

But unlike in the past, cryptocurrency has surprisingly been included in this presidential battle.

Just recently, Trump suddenly announced that he would accept cryptocurrency as campaign donations and encouraged voters who support cryptocurrency to vote for him, stating, "President Joe Biden doesn't even know what cryptocurrency is. If you like any form of cryptocurrency, if you support cryptocurrency, you better vote for Trump."

This is not the first time Trump has shown his support for the crypto space. As early as December 15, 2022, Trump announced the issuance of 45,000 NFTs through his social media platform TruthSocial, with a starting price of $99 each. Those who purchased 45 digital trading cards would receive a ticket to dine with Trump.

From the design of the NFTs, each card in the series features illustrations of Trump's personal image, perhaps to satisfy his desire for self-promotion. The NFT series was designed to depict Trump as various characters, such as a superhero, cowboy, or astronaut, filled with personal flair. Interestingly, on the eve of the release, Trump posted on Truth Social, stating, "America needs a superhero," and emphasized that there would be an 'important announcement.' In response, Biden sarcastically remarked, "I also had some major announcements in the past few weeks…"

Trump's NFT series, source: public information

Earlier this year, he released a third set of "Mugshot" NFTs. Despite the suspicion of exploiting the situation, Trump still kept his promise. On May 8, after appearing in court, Trump flew back to Florida to have dinner with buyers who purchased more than 47 Mugshot Edition NFT trading cards. At the dinner, Trump boasted again, "We did it (sold well) before NFTs were even popular. We will make NFTs hot again."

Trump claims he will make NFTs hot again, source: X platform

It is important to emphasize that aside from the still-warm Bitcoin NFTs, the current NFT space can be said to be in decline. In terms of Ethereum, not only has the overall value of blue-chip NFT series dropped by over 20%, but trading volume and market capitalization have also significantly decreased. According to CryptoSlam data, Ethereum, once the stronghold of NFTs, saw sales of $241 million in April, nearly halving from $489 million in March, marking the worst monthly NFT performance since October 2023.

Whether Trump can truly make NFTs great again remains to be seen; after all, under his leadership, America has not become great again. However, this move has brought cryptocurrency into the electoral spotlight.

From the current stance of the parties on cryptocurrency, the majority of Democrats, led by Biden, tend to be cautious about crypto, especially after the collapse of FTX, which has solidified the Democratic commitment to strict regulation. A clear indicator is that Gary Gensler, the current SEC chairman, often criticized by the crypto community, is a long-time donor to the Democratic Party and previously served as the chief financial officer for Hillary Clinton's 2016 presidential campaign, clearly aligning with the Democratic agenda. In contrast, the majority of Republicans, led by Trump, have rarely shown a tolerant attitude towards cryptocurrency, perhaps to attract votes by indicating differing political views.

In fact, throughout the election, although cryptocurrency occupies a very small portion, it does not mean it is unimportant. On the contrary, small differences in niche topics can significantly influence voter support.

According to an online survey conducted by Harris Poll, commissioned by DCG in early April, cryptocurrency holds considerable sway in several key swing states, including Arizona, Michigan, Montana, Nevada, Ohio, and Pennsylvania, with data showing that about 18% of voters in these states (approximately 3.4 million people) own digital assets. In 2020, Trump lost three swing states by a narrow margin.

Perhaps for this reason, since the election officially kicked off in January, several candidates have expressed support for cryptocurrency. In addition to Trump, presidential candidate Robert F. Kennedy Jr. (nephew of former President John F. Kennedy) is also a staunch supporter of crypto, stating, "Cryptocurrency is our way out of addiction to the Federal Reserve. It is the best way to hedge against inflation. It strips the government and monopolistic banking system of control, which uses money printing to transfer wealth to billionaire oligarchs while leaving ordinary Americans in poverty. If you agree that crypto equals freedom, please help me advance this vision as president."

While it seems that party support rates are surging, if one observes closely, there are quite a few presidential candidates who have flipped their stance for the election. For example, Trump had a very different attitude towards Bitcoin in 2019, stating on the X platform, "I am not a fan of Bitcoin and other cryptocurrencies. Cryptocurrencies are not money, and their value is very volatile. They have no physical form, are created out of thin air, and are unregulated, which allows cryptocurrencies to be used for illegal activities, including drug trafficking and other illegal activities." In 2021, Trump reiterated his personal view, saying, "Bitcoin looks like a scam. I don't like it because it's another currency competing with the dollar."

However, just a few years later, Trump has transformed into a supporter and follower of cryptocurrency, aiming to make NFTs great again, even mocking an 80-year-old man for not being proficient in using crypto software.

The rapid development of the crypto industry in the U.S. has become a significant reason for this shift. In 2022, 9.6% of American adults owned cryptocurrency, compared to just 0.6% in 2015. After the approval of ETFs, more Wall Street institutions have entered the crypto world, with data showing that 11 ETFs have attracted $52 billion in assets. Observing the U.S. government, it holds over 200,000 BTC on-chain, valued at over $6 billion, making it the largest holder among mainstream governments globally. Furthermore, cryptocurrency itself expresses a detachment from censorship and control, aligning well with the current highly polarized American society characterized by vast wealth disparities. Due to its inherent financial advantages, in some third-world countries, such as Nigeria and Ethiopia, support for cryptocurrency has already surpassed that for fiat currency.

Survey on U.S. cryptocurrency holders by SDCPC, source: SDCPC

Of course, even so, the young people who truly occupy the voting base are still a minority, which may also explain why the Biden party is not enthusiastic about it. Analyzing deeper, the establishment behind the Biden party tends to be conservative and traditional, and party supporters strongly oppose cryptocurrencies that threaten the dominance of the national fiat currency. In contrast, other parties may choose the opposite political stance to demonstrate independence, making calls for freedom and equality an important means of party competition.

Upon closer inspection, neither the Democratic nor the Republican parties have genuinely researched or focused on the crypto space. For candidates, the crypto industry is merely a tool, a representation of votes, and they only need to show an appropriate attitude to please their supporters when necessary. Even candidates who claim to support crypto beforehand may face other pressures to flip their stance once in office, as cryptocurrency represents only 1% of the financial landscape compared to traditional issues like welfare and education, which have a far broader impact on the populace. From this perspective, all parties' attention to cryptocurrency is merely temporary.

Sadly, from the perspective of the crypto space, party support is particularly important. Recently, the SEC's regulatory reach has gradually extended from centralized institutions to decentralized projects, with Metamask, Uniswap, and self-custody wallets becoming targets of regulation, undoubtedly causing panic in the crypto market. If decentralized projects are viewed as violating securities laws, then other projects will be left vulnerable.

As the election approaches, frequent law enforcement activities have also led to a sense of conspiracy in the market, with the SEC seemingly indicating a preference for one side. In this context, the crypto industry can only strive for its rights through the election. According to a report by Public Citizen, external lobbying teams related to the cryptocurrency industry have raised over $102 million to lobby for candidates friendly to digital assets in the upcoming U.S. congressional elections. David Bailey, Chief Marketing Officer of Azteco, even tweeted that they have been collaborating with Trump's campaign team over the past month to develop Bitcoin and cryptocurrency policy agendas.

In the early hours of May 9, the U.S. House of Representatives passed the SAB121 repeal bill, which aims to reject the SEC's 2022 staff accounting bulletin (SAB121) regarding the custody and recognition of crypto assets. This bulletin required financial institutions that custody client crypto assets to include them on their balance sheets, which, to ensure transparency, necessitated that custodians account for crypto assets in the liabilities section of their balance sheets, thereby increasing custodial costs and violating the basic principle of treating assets uniformly.

Therefore, the proposal received numerous criticisms upon its release in 2022. The House's passage of it is an important part of the political resistance against crypto. In response, the Biden administration expressed strong opposition, stating that the resolution would affect the SEC's normal enforcement actions and that if the president received the resolution, he would reject the proposal. However, on the other hand, the party is not a monolith. Given Trump's shift in attitude towards crypto, some insiders have suggested to the Biden administration that it should consider adjusting its regulatory stance towards the crypto industry.

It is evident that the struggle over cryptocurrency between the two parties will continue, and until the dust settles, it remains difficult to declare victory for crypto. In the long term, as the adoption of cryptocurrency rapidly increases, the political ecology, which is often held hostage by voters, may also come to the forefront, a situation already seen in concentrated regions like South Korea and Argentina. However, in the short term, cryptocurrency may only be a fleeting theme in the election.

Returning to the crypto world, for those seeking entertainment, the heat of the election is undoubtedly something to capitalize on.

The secondary market has responded, giving rise to election MEME coins, with "BODEN" and "TRUMP" named after Biden and Trump, creating an alternative betting ecosystem. Previously, BODEN, as a Biden election MEME coin, created hundreds of times in gains in a short period, and this year's election will determine who will reap the hundredfold gains.

As of the date of publication, BODEN and TRUMP are priced at $0.26 and $8.66, respectively, with TRUMP rising 14.6% in 24 hours.