US Election Maze: Biden Out... Harris Fight! Trump What?

Preface

The 2024 US presidential election has become a global focus, and the re-election of former President Donald Trump has attracted high attention from the Cryptocurrency market. Although Trump had a negative attitude towards Cryptocurrency during his first term as president, recently he has accepted Cryptocurrency donations and publicly supported the development of BTC, showing a clear change in attitude. Trump is about to attend the 2024 BTC Conference, and the news that Kamala Harris will speak at the conference has further raised market expectations for this event. This article will take this conference as a starting point to explore the [Election Maze] with everyone.

2024 BTC Conference - Politicians’ Show of Fundraising

On July 25th to 27th, the BTC conference will be held in Nashville, Tennessee. Former President Trump has confirmed his attendance, which has raised the market’s attention to the conference, indicating that the conference may have a relevant impact on the encryption market. His policy propositions and public support for BTC development, reducing regulation and promoting economic rise, may bring longer investment opportunities for the encryption market, possibly further boosting market confidence, promoting the development of BTC and the cryptocurrency industry. Meanwhile, its high-intensity topicality may also trigger the emergence of new memes.

In addition to the most popular Trump, the CEO of Micro Strategy and the founder of ARK Invest “Sister Wood” will also attend the conference and give a speech. MicroStrategy is one of the world’s largest corporate BTCholders, with holdings of 226,331 BTC and a market cap of approximately $1.514 billion as of June 2024. ARK Invest, as one of the issuers of the BTCSpot ETF, needs to clearly express its long-term bullishness and positive predictions for BTC to attract more traditional investors to the encryption market.

This technical presentation may attract investors’ attention to the ecosystem construction of BTC in a longer term. The conference will showcase and discuss many technological innovations, especially in the areas of Lighting Network, Smart Contracts, and Zero-Knowledge Proofs. These technological advancements may have a positive impact on the encryption market, enhancing the practicality and security of BTC and other cryptocurrencies, and promoting their application in longer-term business and daily life. The involvement of Casey, the creator of Ordinals and Runes protocol, may ignite the vitality of the related meme projects of the Runes protocol.

However, the relatively clear situation was disrupted by a news on the 24th:

On the 24th, The Kobeissi Letter announced that Fox News reported that Harris will give a speech at the BTC conference, which currently has no significant impact on the overall price of BTC. However, it is worth noting that according to the latest Reuters poll data, Harris is leading Trump by two percentage points (44% vs. 42%) in the presidential election. The poll was conducted in July and covered 1,241 American adults, including 1,018 registered voters, and was collected through online surveys, which have a certain representativeness but also limitations.

Compared to the support rate data in RealClearPolling, Trump still leads Harris by about 1.6 percentage points. Comparing the longer data, it can be found that the support rates of both sides are in a relatively close state. It is worth considering whether Harris’s confirmation of attendance at this BTC conference will tilt the market, which is relatively one-sided in the encryption market.

The economic support behind the election

Whether it’s Trump or Harris, you and I in the market don’t really believe that both sides truly endorse POW, reach a consensus with the encryption market, and want to build a decentralized world system for everyone. Capitalist politicians talk about supporting decentralization, which is ironic and humorous. But as long as interests are aligned, everyone can cooperate and win together.

So in the case of Trump’s re-election, it will be found that his political campaign funding has significant encryption market support, first of all represented by important figures in Silicon Valley such as Elon Musk, co-founder of PayPal Kenneth Howery, venture capitalist Marc Andreessen and Ben Horowitz.

Reasons why Silicon Valley capitalists support Trump

1. Economic Benefits

Trump’s tax reduction policy and business-friendly stance have allowed Silicon Valley capitalists to enjoy longer economic benefits. For example, the 2017 Tax Cuts and Jobs Act significantly dropped the corporate tax rate, resulting in substantial reductions in tax payments for tech companies. According to the latest data, during Trump’s presidency, the US corporate income tax dropped from 35% to 21%, directly increasing the profit margin for Silicon Valley tech companies.

2. Policy Orientation

Silicon Valley entrepreneurs tend to support a free market and innovative environment, and they tend to reduce government intervention in the technology and innovation industries. Trump’s policy proposals are highly in line with this. For example, he signed the ‘Artificial Intelligence Initiative’ in 2020 to promote the development of AI technology and reduce the regulation of emerging technologies. In addition, Trump’s relaxed attitude towards mergers and acquisitions by big tech companies also provides more freedom for capital operations in Silicon Valley.

3. Financial Market Stability

The collapse of Silicon Valley Bank (SVB) in March 2023 has had a significant impact on the technology and venture capital (VC) market. Trump’s promised reduction in regulation and policies to promote economic rise may help restore market confidence and stabilize the financial market. The SVB collapse shows that technology companies are highly dependent on financial infrastructure and require policy support to ensure market stability and sustainable development.

4. Technical Development Support

During his campaign, Trump expressed support for the development of BTC and other cryptocurrencies, aligning with the interests of Silicon Valley capitalists. Many companies and investors in Silicon Valley believe that cryptocurrencies and blockchain technology represent the future of financial innovation. They hope to promote the adoption and application of these technologies through policy support. For example, a16z invested $2 billion in cryptocurrency and blockchain projects in 2023, demonstrating a high level of importance in this field.

And Harris’s current large amount of campaign funds come from individual donations and other committee transfers. He has performed well in long fundraising campaigns and raised $1.25 million at an LGBTQ event in New York City, the highest fundraising amount in the event’s history. If Harris confirms attendance at the Bitcoin conference, he may directly ask for money and election support from the audience and compete with Trump for votes. However, from the comments on the tweet announcing Harris’s possible attendance at the Bitcoin conference, it can be seen that most encryption market users are already disheartened by Harris’s and Biden’s three-year history of persecution, directly pointing out the purpose of Harris’s trip as ‘vote grab’.

Should we really believe Trump?

Although Trump’s current inclination and remarks show a crypto-friendly attitude, he himself carries a strong business aura, and all actions and remarks are driven by self-interest. Therefore, considering the risk, we need to guard against the possibility of policy black swans and evaluate the reality of his commitment to implementation.

1. Redemption Risk

As a reference, we can review the fulfillment during Trump’s tenure. According to Politifact.com statistics, during the 2016 campaign, out of 100 promises made by Trump, 55% were never fulfilled, 22% were fulfilled after compromise, and only 23% were successfully fulfilled.

Trump-O-Meter（Source：PolitiFact）

In addition, you can refer to Trump’s remarks this year. As of now (2024.7.22), he has made a total of 1029 statements/comments (not all of them are promises), of which only 36 (3%) are true, 85 (8%) are mostly true, and the remaining 908 are half true and below, with 56% being false and absurd (Pants on Fire) statements.

US Election Maze: Biden Out… Harris Fight! Trump What?

Donald Trump’s Election Comments 2024.7.22（Source: PolitiFact）

By contrast, the current US President who has already formally announced his withdrawal, Joe Biden, only made 22% erroneous and absurd remarks in this year’s election.

US Election Maze: Biden Out… Harris Fight! Trump What?

Joe Biden’s Election Comments 2024.7.22（Source：PolitiFact）

And the Democratic candidate Kamala Harris’s 19% false statement:

US Election Maze: Biden Out… Harris Fight! Trump What?

Kamala Harris’s Election Comments 2024.7.22（Source：PolitiFact）

Biden and Harris had significantly fewer remarks in this election than Trump, and their remarks were relatively more “accurate”. Moreover, Trump had a larger quantity of remarks, and more than half of his remarks were “wrong” and “absurd” compared to all the candidates’ remarks.

• 670 erroneous remarks, Trump392 remarks;
• 315 absurd remarks, 192 Trump remarks.

US Election Maze: Biden Out… Harris Fight! Trump What?

Total Election Comments 2024.7.22（Source：PolitiFact）

Combining Trump’s track record in fulfilling his promises during his previous term, even though his election to office is a major Favourable Information for the encryption market, promising a relaxed encryption regulatory environment, we still cannot blindly optimistic and must follow the fulfillment of his promises after his possible victory. (The above data comparison is intended to show that Trump’s campaign rhetoric is more radical, not to render the Democratic candidate more credible or superior.)

2. Attitude Risk

During his tenure in 2019, Trump publicly commented on BTC: ‘I am not a fan of BTC and Cryptocurrency. These things are not money, their value is built on air.’

Trump on Bitcoin & Cryptocurrencies 2019.7.12（Source：X）

In 2021, it was once said that ‘BTC is eyewash and a threat to all mainstream currencies’:

US Election Maze: Biden Out… Harris Fight! Trump What?

Donald Trump calls Bitcoin ‘a scam against the dollar’（Source: BBC）

In March of this year, he publicly stated that if he were re-elected as president, his government would not use regulatory agencies to crack down on the use of BTC or other cryptocurrencies.

US Election Maze: Biden Out… Harris Fight! Trump What?

Trump suggests he would not crack down on bitcoin, other cryptocurrencies as president（Source：CNBC）

In May, I said, ‘I will ensure that the history of Cryptocurrency and the history of BTC will be created in my country, not driven overseas.’

US Election Maze: Biden Out… Harris Fight! Trump What?

Trump: I will ensure crypto history is made in US（Source：Baha Breaking News）

In this election, Trump’s attitude has taken a major turn, choosing to embrace Cryptocurrency, promising that the motivation to win over the encryption community is inseparable from the benefits of his actions. Although the probability may not be too high, once he takes office and chooses to backtrack or break his promise, it may be a heavy blow to the encryption market, and all promises may become unfulfilled.

3. Other Risks

Centralization Risk: The United States holds the largest amount of BTC in the world, coupled with the possibility of Trump announcing BTC as a national strategic reserve asset. In line with his consistently strong style, there is a certain degree of risk that BTC or the encryption market may gradually become US-centric in the future.

Election Risk: Although Trump’s current approval rating may be higher than that of the new Democratic Party’s main candidate, Harris, there is also a risk of failure. The latter has not yet publicly expressed her attitude towards Cryptocurrency, and it is known that she and her husband Douglas Emhoff have never been involved in the encryption field and are TradFi investors. If Harris is elected, her attitude towards the encryption market will also be crucial.

On-chain Support Rate (Source: PolyMarket)

Market Fluctuation Risk: Given the frequent market fluctuations in recent times, even though the factors of favorable information are prominent at present, there is still a possibility of sudden negative news that could cause panic selling in the bull market before and after the arrival of the main upward wave.

Summary

Trump’s re-election and his embrace of the encryption market have brought greater possibilities and volatility to the market. His policy shift and support may attract more long-term investors into the market, driving market rise.

From early January 2024 expressing that it will not allow the creation of Central Bank Digital Money (CBDC) in the United States to participating in the Non-fungible Token fundraising dinner on May 8th and announcing that supporters can donate using Cryptocurrency, reiterating that he will be the ‘encryption president’, all have had a certain impact on the price of BTC in a short period of time. The high-profile attendance at the BTC conference this time has been brewing for a while, combined with multiple factors in the market, the actual effect and performance will be revealed over time, and Harris’ participation has raised the attention of the entire conference to a new level. However, even if Trump or Harris, who are now embracing BTC on the surface, take office, whether there will be a repeated behavior of ‘fattening the sheep and then killing it’ is also a concern for everyone.

Future Report (Not Yet Complete): WolfDAO will continue to delve into the impact of the US election on the encryption market, especially on specific participatory projects. Stay tuned for further detailed reports.

Source: Sylvia / Cage / Nora / Riffi / Mat / Darl

Editing and proofreading: Punko

Special Thanks: Thank you to the above partners for their outstanding contributions to this issue.