Iron-fisted SEC Chairman steps down, which projects will directly benefit?

With Trump's election as President of the United States, his promise to replace the SEC chairman on his first day in office is set to be executed ahead of schedule. Last week, SEC Chairman Gary Gensler announced that he would step down on January 20, 2025, around the time of Trump's inauguration. Following the news, the sentiment in the crypto market improved, leading to a nearly 30% surge in "SEC securities" like XRP and ADA, which have long faced regulatory pressure from the SEC.

Regarded as the Number One Opponent in the Crypto Space

Since taking office, Gary Gensler has adopted a strict regulatory stance towards the cryptocurrency industry. He has repeatedly emphasized that BTC is the only cryptocurrency with commodity attributes, while other cryptocurrencies are often viewed as having securities characteristics, a position that has drawn considerable controversy and criticism. During his tenure, Gensler took enforcement actions against multiple entities, including Coinbase, Kraken, Robinhood, OpenSea, Uniswap, and MetaMask, completing thousands of enforcement cases and collecting approximately $21 billion in fines, making him the number one opponent in the crypto space. Previously, attorneys general from 18 U.S. states even jointly filed a lawsuit against the SEC and its five commissioners, accusing the SEC under Gensler's leadership of unconstitutional overreach and unfair suppression of the cryptocurrency industry.

However, despite Gensler's tough stance on cryptocurrencies, he approved spot ETFs for Bitcoin and Ethereum during his tenure, which undoubtedly injected a strong boost into the development of crypto. This seemingly contradictory behavior is based on a common logic: integrating cryptocurrencies into the U.S. regulatory framework, which is also a key policy of the Biden administration.

Pressure on SEC Securities Eases

Gensler's departure has not only relieved many investors and crypto companies suffering from regulatory pressure but also brought hope to tokens significantly affected by the SEC, most notably Ripple, the leading "SEC security."

As early as December 2020, the SEC began accusing Ripple of illegally issuing unregistered securities. Platforms like Coinbase and Robinhood even temporarily delisted XRP, causing its price to plummet. This marked the official start of the lawsuit between the SEC and Ripple, attracting widespread attention in the crypto market. The question of whether cryptocurrencies fall under securities regulations has been highly controversial, making the final judgment of this case significantly impactful for the entire cryptocurrency sector.

Every time news breaks, XRP experiences significant volatility, affecting the prices of other altcoins also accused by the SEC as securities, such as ADA, MATIC, SOL, and FIL, creating a special sector known as "SEC securities."

Now, with the SEC chairman's departure, Ripple, which has been embroiled in a lengthy lawsuit with the SEC, has transformed into a "SEC revenge" concept coin, experiencing a rebound. Other tokens that have long faced regulatory pressure from the SEC, such as ADA and SOL, have also seen similar increases.

Which Crypto Companies Targeted by the SEC May Benefit?

Currently, Trump has not officially announced his preferred candidate for the new SEC chairman, but several popular candidates are friendly towards cryptocurrencies and have publicly expressed support for them. Under a crypto-friendly policy, it is expected that SEC enforcement actions in the crypto space will significantly decrease, and some staff within the SEC who have taken aggressive enforcement actions may face layoffs.

This means that "SEC securities" like Ripple, which were previously suppressed and sued by the SEC, may see their lawsuits soften, settle, or even be withdrawn. Additionally, projects that have refrained from issuing tokens or empowering tokens due to fear of the SEC may become the biggest direct beneficiaries. Furthermore, this could also promote Ethereum staking services, such as spot ETH ETFs providing staking rewards, thereby increasing Ethereum's price. Here are a few representative projects that may directly benefit:

1. XRP: Regulatory Clouds Lift, Market Performance Anticipated

XRP, as an early public chain project, initially aimed to become the global CBDC settlement layer. However, due to competition and lawsuits, this solution has not been fully realized. It is currently attempting to expand and transform its TOC business by supporting some sidechain projects to introduce smart contract functionality for Ripple.

Due to its business positioning, XRP's market performance has not been very strong. However, it has a large user base and fan following, along with relatively advantageous background resources. The historical accumulation and brand effect of XRP are its biggest highlights and leverage points, giving it considerable potential in a thriving industry ecosystem. This allows it to easily leverage the market in the TOC area, improving its market capitalization performance. If XRP can achieve certain results in the TOC direction, it will significantly enhance the project's market value and TOB business, providing ample funds and space to expand its cross-border settlement business.

This time, Gensler's resignation has led to XRP's rise being driven not just by sentiment but also by reactions to multiple market expectations. First, XRP may be relisted on more exchanges, expanding its market liquidity, as Robinhood relisted Ripple (XRP) on November 13. Second, Ripple's business operations will focus more on core technology rather than legal battles. Since the SEC filed a lawsuit against it, Ripple has been fully engaged in this legal fight. In the second half of 2023, Ripple's CEO stated that the company had paid over $200 million in legal fees.

Additionally, it is worth noting that several ETF issuers, including 21Shares and Bitwise, have submitted applications to the SEC to launch a spot XRP ETF, further highlighting the market's positive expectations for XRP's future development.

2. ADA: Greater Elasticity Under Whale Effect

Cardano, a project that emerged in 2017, has its native token ADA regarded as an innovative platform centered on technical robustness and academic-driven principles, giving it a sense of stability and low profile but with immense potential, consistently ranking in the top ten of the cryptocurrency market capitalization. As an established public chain, Cardano's current ecosystem performs relatively average compared to several well-known public chains on the market, leading many in the community to view it as a "meme coin." The significant gap between its market capitalization and project development is related to the centralization of the ADA token and whale control.

According to statistics from stakingrewards.com, Cardano (ADA) ranks fourth among cryptocurrencies in terms of total value staked, with a total staked value of nearly $21 billion and a staking rate exceeding 61%. This indicates that ADA has undergone centralized locking, controlling the market circulation to some extent.

Moreover, according to data from blockchain analysis platform IntoTheBlock, 72% of ADA holding addresses have not transferred funds for over a year, and currently, as much as 67% of holders are in profit at current market prices, indicating that its investor base primarily consists of long-term holders. This "faith layer" provides stable support for ADA's price and reflects the market's optimistic expectations for its future growth.

From the data, nearly half of Cardano's circulating supply is controlled by about 400 addresses, which somewhat weakens market liquidity, making ADA's price more susceptible to large capital inflows. It also shows the confidence and interest of whales in the price increase of ADA.

ADA Holding Addresses

Currently, the crypto market remains strong, with rising risk appetite among investors and noticeable sector rotation, leading to a rebound in altcoins. Although Cardano's ecosystem performance still needs improvement, as a well-known established public chain, its high staking rate and whale holding ratio provide greater elasticity and growth potential for its price.

3. Uniswap: Accelerated Empowerment

As the leader in DEX, Uniswap is one of the few projects in the crypto industry with sustainable high profitability. However, due to long-term regulatory pressure, the empowerment of the UNI token has remained unresolved. In February of this year, the Uniswap Foundation released a proposal regarding "initiating governance of the Uniswap protocol," suggesting that protocol fees be proportionally distributed to staked and delegated voting rights holders of UNI tokens. This news quickly sparked market enthusiasm, with the UNI price soaring from $7 to around $12 overnight. However, as of May, this fee distribution mechanism had still not been implemented.

In April of this year, the SEC issued a warning to Uniswap Labs, planning to take enforcement action against it. This event had a certain negative impact on market sentiment, and UNI's market performance became relatively flat afterward. Until October of this year, Uniswap Labs announced plans to launch the Unichain, injecting new imaginative space into the Uniswap ecosystem and bringing the empowerment topic of the UNI token back into the market spotlight.

Now, with the SEC chairman's departure, the market shows high optimism for a more relaxed future regulatory environment. In this context, the easing of regulatory pressure releases more potential for decentralized platforms and provides favorable conditions for the expansion of the Uniswap ecosystem, helping the UNI token gradually transform from a single governance token into a core asset with multiple functions, including governance, yield capture, and ecosystem empowerment. How this transformation will further empower UNI token holders through the fee distribution mechanism and the implementation of Unichain is worth the market's continued attention and anticipation.

4. Base: Increased Expectations for Token Issuance

Base, an Ethereum Layer 2 protocol incubated by Coinbase, has been under community scrutiny and anticipation for the issuance of its token since its official launch in August last year. At that time, Coinbase clearly stated that there were no plans to issue a token. The strategy of not issuing a token may have helped Coinbase avoid regulatory pitfalls under the pressure of the ongoing lawsuit with the SEC. In a recent inquiry from the community regarding the token issuance plan, Coinbase's Chief Legal Officer reiterated that there were no plans to issue a token but stated that issuing a token is a feasible option when regulations become clearer, indicating that Base does not rule out launching a token in the future.

It is noteworthy that ConsenSys, the parent company of MetaMask, which is also under SEC investigation, was rumored earlier to be canceling or postponing its Layer 2 protocol Linea's token plan due to regulatory pressure, sparking market discussions. After Trump's victory, ConsenSys expressed optimism about token issuance under a more relaxed regulatory environment and announced at the Devcon conference held in Bangkok that it would issue a token in Q1 of next year, indirectly fueling market expectations for Base's token issuance.

According to defillama data, Base currently ranks sixth in total value locked (TVL) among DeFi protocols, with total deposits reaching $3.3 billion, second only to ETH and BSC among EVM chains. With the relaxation of the regulatory environment and the continuous maturation of the Base chain ecosystem, whether to issue a token in the future and the specific design of the token will be the focus of market attention.

Currently, Trump's "cabinet formation" is nearly complete, and several of his nominated ministers have expressed support for cryptocurrencies, demonstrating the significant political influence of cryptocurrencies in the U.S. The market's optimistic sentiment regarding the future development of the crypto industry is also on the rise. 4E, as the official partner of the Argentine national team, supports spot and contract trading of over 200 cryptocurrencies, including Bitcoin, Ethereum, SOL, XRP, and ADA, covering various sectors such as "SEC securities," Meme, and DeFi, with high liquidity and low fees.

At the same time, 4E integrates traditional financial assets into the platform, establishing a comprehensive one-stop trading system that covers everything from deposits to crypto assets, as well as U.S. stocks, indices, foreign exchange, and bulk gold, with over 600 different risk-level assets available for investment at any time with USDT. Additionally, the 4E platform has set up a $100 million risk protection fund, adding another layer of security for users' funds. With 4E, investors can keep up with market dynamics, flexibly adjust strategies and allocations, and seize every potential opportunity.