Biden withdraws, is the crypto industry "saved"?

Author: Wenser, Odaily Planet Daily

At 2 AM today, Biden announced his withdrawal from the 2024 U.S. presidential election. As a result, the cryptocurrency market experienced a "flash crash," with Bitcoin dropping to around $65,700 and Ethereum falling to about $3,400, but it quickly rebounded. For details, see the market analysis "3-Minute Overview of Future Market Trends: Has the Bottoming Out Ended, and Is an Uptrend Inevitable?" Subsequently, Biden endorsed Vice President Harris as the Democratic presidential candidate.

This article interprets and analyzes the impact of this event on the cryptocurrency industry.

Cryptocurrency Impact: Token Prices Vary

In addition to Bitcoin and Ethereum being affected by news related to the U.S. election, many related tokens, especially meme coins, also experienced varying degrees of impact in the short term, including:

BODEN: Down Over 110 Times from Its Peak

On-chain data shows that the Biden-themed Solana ecosystem meme token BODEN (in contrast to the Trump-themed meme coin TREMP) dropped about 63% within 4 hours after Biden announced his withdrawal. Currently, its price has fallen to around $0.0094, which is over 110 times lower than its peak price of $1.08 in early April. The project's current market cap is $6.4 million.

On-chain data

TREMP: Price Once Soared Over 30%

In contrast to BODEN, the Solana ecosystem meme coin TREMP surged from $0.45 to nearly $0.6 after Biden officially announced his withdrawal, with a rise of over 33.3% within one hour. Currently, TREMP's price is stable at around $0.45, which is a decline of only about 75% from its price peak of $1.66 in early June. The project's current market cap is $45.2 million.

On-chain data

KAMA: Price Once Increased Over 3 Times, Now Has Retreated

The meme coin KAMA, named after Kamala Harris, who has been supported by Biden as the Democratic presidential candidate, surged from around $0.01 to $0.03 after Biden's withdrawal announcement, then fluctuated downwards. Its current price is stable at around $0.016, and the project's market cap has increased tenfold compared to the end of June, currently around $16.8 million.

On-chain data

OBAMA: Price Once Increased Over 276%

Another potential Democratic candidate, Michelle Obama, has a meme coin named OBAMA that also performed well. After the announcement of Biden's withdrawal, it surged from a price of $0.003 to over $0.008, with an increase of up to 276% within one hour. Although it later fell below $0.003, it has now stabilized at around $0.0074, with a project market cap of about $7.4 million.

On-chain data

Political Candidate Impact: Democratic Election Situation Is Grim, But Crypto-Friendly Policies May Become Inevitable

After Biden announced his withdrawal, the Democratic presidential candidate situation became uncertain.

According to RNC Research, despite Biden's support, Democratic Representative Jasmine Crockett expressed "not a bit of confidence" in Kamala Harris's ability to win the election, as "privately," Democrats believe "it can't be her."

However, the policy group CIFonX stated that Biden's exit provides an opportunity for the Democratic Party to re-evaluate its cryptocurrency policies, and they may attract voters by changing their stance on cryptocurrencies. Variant Fund's Chief Legal Officer, Chervinsky, has criticized the Biden administration's hostile attitude toward cryptocurrencies and pointed out that Trump is actively courting the crypto vote, promising to end "Biden's war on cryptocurrencies."

Additionally, a report from the crypto research firm 10x Research indicated that with Biden's withdrawal, a crypto-friendly government will take office in the White House. Historically, this means that the SEC Chair resigns when a new government is elected. Although SEC Chair Gary Gensler's term will end on June 5, 2026, he may also resign in January or February 2025.

Furthermore, according to media reports, in local political elections, the crypto political action committee (PAC) Protect Progress has invested over $1.3 million to support Democratic candidate Yassamin Ansari's campaign for Arizona's 3rd congressional district. Her campaign website indicates that Ansari supports "leading blockchain and crypto innovation" and previously completed Coinbase's Stand With Crypto questionnaire, stating that if elected to Congress, she would promote legislation supporting cryptocurrencies.

After Trump garnered widespread support from the cryptocurrency industry through frequent statements and his attendance at this month's Bitcoin conference in Tennessee, it seems inevitable that the Democratic Party will shift toward a crypto-friendly direction, regardless of who runs before the election dust settles.

Long-term Impact on the Crypto Industry: Saying Goodbye to High-pressure Regulation, Entering a "Crypto-Friendly Honeymoon Period"

The crypto asset accounting standard SAB 121, seen as a tool for the SEC to suppress digital assets, was passed, and a resolution was proposed to overturn this standard but was vetoed by Biden. In an official statement on May 31, he stated, "Overturning the SEC staff's well-considered judgment in this way could undermine the SEC's broader authority in accounting practices. My administration will not support measures that jeopardize the welfare of consumers and investors."

Despite a recent vote by a majority of House members opposing President Biden's support for the SEC's (SAB 121) crypto accounting policy, the standard remains in effect as the vote did not reach the two-thirds majority needed to overturn the veto. The negotiations between the SEC and the banking industry for amendments and the Republican push to repeal this standard cannot change this reality.

SEC Commissioner Hester Peirce, known as the "crypto mom," also condemned this and criticized her agency's regulatory approach. Notably, Trump nominated her for a second term back on June 4, 2020, making her one of the "Trump faction" personnel. Previously, she expressed dissatisfaction with the SEC's external responses, stating, "When individuals and entities seek feedback, concerns, and questions from the SEC, they often encounter 'silent responses.' The root of the problem is that the SEC does not encourage staff to provide more than shrugs, silence, slow walks, and sighs. The culture at the top of this agency has changed, leading to a change in the way the entire agency interacts with the public."

In a recent response to the Bank of England's consultation document on digital securities sandboxes, Hester Peirce also indicated a preference for being a "beach-style regulator" for digital securities rather than a "sandbox-style regulator." As a regulator, the focus should not be on proposing how innovations can improve financial markets but on ensuring that innovators can attempt to put their ideas into practice.

This point was further validated in a recent interview with Coinage regarding the "potential for staking in Ethereum ETFs." When asked what the top priority would be if she became SEC Chair, she responded that it should be "to ensure the vitality of the industry, allow investors to make their own decisions, and ensure that we do not set unnecessary barriers in rule-making."

Thus, as the U.S. election progresses and the trading of Ethereum spot ETFs gradually unfolds, the previously high-pressure regulatory stance that the SEC conveyed to the cryptocurrency industry will significantly improve.

With strong financial support from figures in the crypto industry, including Bitcoin Magazine CEO David Bailey, Gemini founders, Winklevoss Capital Management founders, Kraken co-founder Jesse Powell, Ripple's Chief Legal Officer Stuart Alderoty, BitGo CEO Michael Belshe, and Messari founder and former CEO Ryan Selkis, as well as investors like Tesla founder Elon Musk, former Tesla board member and Valor Equity partner and CEO Antonio Gracias, Sequoia Capital partner Douglas Leone, and investor Shaun Maguire, and co-founder of VC firm Founders Fund Kenneth Howery, and Palantir Technologies co-founder Joe Lonsdale, if Trump successfully wins the presidency, the relationship between the crypto industry and the U.S. government may change from a previously tense situation to a "crypto-friendly honeymoon period."