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The real winner of the 2024 US elections will be crypto | Opinion

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Crypto is the darling of the 2024 elections, and I’m totally here for it. For the first time in history, two presidential candidates are actively courting the crypto vote. Donald Trump made his pitch at the Bitcoin 2024 Conference addressing crypto voters, which was met with an astonishing vote of support from the crypto community. Democrats, unwilling to concede the crypto vote to Trump, held a crypto reset meeting with prominent industry leaders and also launched Crypto for Harris.

However, in the not-so-distant past, many proclaimed crypto “dead.” The industry experienced a brutal crypto winter, losing over two trillion in market cap in 2022 and global scrutiny from regulators. Now, two years later, crypto has emerged as the dominant player in the 2024 elections. Game on.

The SEC’s villain origin story

Crypto’s ascension into a key player on the political stage is rooted in its antagonistic sparring with the US Securities and Exchange Commission. According to Binance attorneys, Gary Gensler approached Binance to become an advisor in 2019, but the company rejected his offer. 

Since 2021, there has been a considerable uptick in SEC crypto-related cases since President Joe Biden appointed Gary Gensler SEC Chair/Biden. Coincidence? I think not. Three court cases that truly establish the SEC as the chief crypto supervillain:   

  • Number one, in the Telegram court case, the company had to return over a billion US dollars from a token raise. Ushering the reign in of SAFTs, Simple Agreement For Future Tokens contracts, and the ICO boom in the US.
  • Number two is the Ripple Labs case, which ultimately found Ripple (XRP) to be a security on the institutional side but not a security on the retail side.  
  • Third, the BitMEX case, where the arrests of the founders of such top-tier exchange for AML/KYC violations, usually a slap on the wrist, shook the industry. 

The legal actions taken against these companies were like warning shots fired by the SEC, foreshadowing the heavy hand they would take towards major crypto companies.

The switch up: From a friend to a foe

Once crypto winter hit, after Terra Luna collapsed, public sentiment was that bad actors in space need to be removed and held accountable. Seizing on the opportunity, the SEC began its crypto crackdown, handing out Wells notices like Halloween candy, forcing some companies to divest from US operations or close up shop to stop the bleeding.  

Even companies once seen as allies became targets. The irony is that the SEC accused Coinbase of operating an illicit exchange. Coinbase has acted as a custodian of the US government, working directly with the US Marshals Service to sell Bitcoin (BTC) confiscated from the “illicit” website, the Silk Road. 

This is a rather strange “UNO reverse” move by the SEC since Coinbase is US-based, a BitLicense holder, along with being a publicly traded company.

Crypto fights back

A major noticeable change is the crypto industry has gone on the offensive, accusing federal regulators of refusing to create reasonable crypto regulations and guidelines for the industry.  Gemini COO Marshall Beard voiced his frustration in an interview with Bloomberg TV: “We’ve been asking for broader regulation, we’ve been doing this for a decade now, and the US does not have a broad crypto regulation framework.”

Key players in the crypto space beefed up government relations efforts by partnering with lobbying firms and donating campaign dollars to crypto-friendly candidates. Some have even hit back by counter-suing the SEC.

According to Open Secrets, a campaign finance tracking site, crypto political campaign contributions have dramatically increased from the 2020 election cycle to 2022. Nearly 50% of the corporate donations are coming from crypto companies.  To top it off, Fairshake is the largest Super PAC, crypto industry-funded, in this campaign cycle, raising over $200 million. Solidifying crypto’s dominance and influence in the 2024 elections.

Source: OpenSecrets

Key voting block in swing states 

Crypto voters are taking front and center in the 2024 US Presidential elections. Perianne Boring, CEO and founder of the Chamber of Digital Commerce, accurately predicted this scenario in a 2022 CNBC interview:

“I think that the watershed moment for crypto and politics is likely to be in 2024 and I think the next presidential election. The candidate that is able to figure out how to leverage blockchain to tap into the crypto community is going to be our next president.”

Political analysts anticipate the US Presidential election to be a very tight race, where small factions in the electorate may hold the key to victory. The crypto industry has taken note, going to painstaking lengths to position crypto as a wedge issue, collecting extensive data and research about swing voters. 

Data from a recent Harris poll suggests that one in five battleground state voters consider crypto a key issue. The industry as a whole has crypto voters who are very engaged, very active, and very aware of their power in the upcoming election. 

Stand With Crypto, a pro-crypto advocacy group, has already amassed close to 1.5 million online registrations. Their America Loves Crypto Tour is hitting five battleground states in September to increase crypto voter turnout.

Playing all sides to win

Crypto lobbying groups have pledged no allegiance to any side and actively donate to both Republicans and Democrats. However, that has not stopped crypto leaders like Arthur Hayes and Charles Hoskinson from weighing in on the elections. With some going as far as endorsing candidates. 

The Winklevoss twins have thrown their support behind Donald Trump, while Ripple’s co-founder, Chris Larsen, is backing Kamala Harris. Crypto industry visibility has surpassed anything seen in previous campaign cycles. It’s positioned its community as a key voting demographic so that candidates must earn their votes.

Regardless of which candidate wins, crypto has proven to be the real winner of the 2024 elections by coming back from a brutal crypto winter and an equally difficult assault from federal regulators: Going from being written off completely by mainstream media to artfully mastering DC politics, rising from the ashes like a Phoenix. 

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Theo Crypto News

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Cardano’s Hoskinson warns Trump-backed crypto venture could harm industry

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Cardano founder raised concerns about the Trump-backed crypto platform, warning it could bring regulatory challenges and politicize the industry.

Charles Hoskinson, founder of the Cardano (ADA) blockchain, has expressed concerns over World Liberty Financial, a new decentralized finance platform backed by former U.S. President Donald Trump and his sons.

In an interview with the Financial Times, Hoskinson warned that Trump’s push into crypto could complicate the regulatory landscape for the industry, saying that “everything Trump does the left hates with such a passion.” He also cautioned that this partisanship could provoke investigations from U.S. regulatory bodies, potentially destabilizing the broader crypto market.

Despite Trump’s previous dismissal of Bitcoin as a “scam,” he has recently pledged to transform the U.S. into a “Bitcoin superpower.” However, Hoskinson remains skeptical of both Trump and Kamala Harris‘s ability to foster a supportive environment for cryptocurrency as he believes that neither candidate demonstrates the necessary sophistication in understanding crypto issues.

“I do not see that level of quality and sophistication in the discourse [with Trump or Kamala Harris in the crypto space].”

Charles Hoskinson

Hoskinson’s comments follow World Liberty Financial’s confirmation that it plans to launch a governance token, WLFI, which will be available only to accredited investors under a Regulation D exemption. The project has enlisted top-tier security firms to audit and secure the platform as regulatory uncertainty remains a challenge.

Nonetheless, Hoskinson still believes Trump may struggle to fulfill his pro-crypto policy promises if he wins the November election, casting doubt on the administration’s capacity to nurture the industry.

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Theo Crypto News

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SkyBridge’s Scaramucci expects Bitcoin to hit six figures by 2024-end

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SkyBridge Capital’s Anthony Scaramucci predicts Bitcoin could reach $100,000 by the end of 2024, driven by rate cuts and potential pro-crypto legislation.

SkyBridge Capital founder and hedge fund manager Anthony Scaramucci predicts Bitcoin (BTC) will reach $100,000 by the end of 2024, driven by U.S. interest-rate cuts and potential pro-crypto legislation.

In an interview with Bloomberg, Scaramucci highlighted that upcoming Federal Reserve rate cuts and bipartisan support for crypto and stablecoin legislation in the next U.S. congressional term could fuel a significant rise in Bitcoin’s value.

“We are going to get pro-cryptocurrency, Bitcoin, and stablecoin legislation in the first part of the next congressional term in the U.S. At the same time, you are intersecting with rate cuts from the Federal Reserve.”

Anthony Scaramucci

A former communications director for Donald Trump, Scaramucci noted the Republican nominee’s recent shift to a pro-crypto stance as he seeks votes in a close race against Vice President Kamala Harris, whose position on crypto is less defined.

Despite the ambiguity, Scaramucci expressed optimism about the regulatory landscape under a potential Harris administration, citing positive discussions with her campaign team. The SkyBridge Capital head expects the Federal Reserve to cut borrowing costs by half a percentage point, with up to 150 basis points of cuts in the next 18 months. He believes such moves will be favorable for asset prices globally, including Bitcoin, which has already risen 5% in the lead-up to the Fed’s policy decision.

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DeFi

MAGA, FIGHT, and DJT surge as Trump’s crypto project announces WLFI token

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Donald Trump-themed cryptocurrencies surged as World Liberty Financial announced a new governance token.

Fight to MAGA (FIGHT) led the charge with a massive surge of over 150%, pushing its valuation to $10.3 million. TrumpCoin (DJT) also saw a strong rally, climbing 28% to reach $0.00032, its highest since Aug. 7, with daily trading volumes near $1 million. Meanwhile, MAGA (MAGA) rose by 18% over the past day, with a daily trading volume of $11.48 million.

All these gains helped push the total market cap of political-themed tokens past $481 million. Meanwhile, the community sentiment around the tokens had also turned bullish according to Coinmarketcap data.

These tokens rallied after Donald Trump’s crypto initiative, World Liberty Financial, announced its plans to release a governance token named WLFI.

WLFI has been advertised as a non-transferable governance token, allowing holders to propose and vote on platform-related matters. Approximately 63% of the total token supply is designated for public sale, with 17% for user rewards, and the remaining 20% for the team and advisors.

While the token’s launch date remains undisclosed, the project team has confirmed that sales will be limited to accredited investors.

Despite the rise on Sept. 17, political-themed tokens have been experiencing a downturn, with their total market cap now down to $481 million.

These tokens tend to gain prominence during election seasons, potentially losing much of their relevance after the elections conclude. Traders often refer to these as “event coins” because their prices are influenced as the date of the related event approaches.

However, in the short term, these coins could see further gains if Bitcoin (BTC) breaks past its previous high, as meme coins often thrive during Bitcoin’s bull runs. Factors that could drive Bitcoin’s price higher include possible cuts in Federal Reserve rates, a weakening US dollar, and a continuing stock market rally.

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DeFi

Donald Trump’s WLFI token to be limited to accredited investors

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Donald Trump’s crypto project World Liberty Financial has confirmed plans to launch a governance token that will only be available to accredited investors.

After surviving a second assassination attempt, Former President Donald Trump made his first public appearance in an interview with crypto influencer Farokh Sarmad during a Sept. 17 X spaces where the World Liberty Financial team members unveiled the WLFI token to over 100,000 listeners.

The WLFI token will be sold under a Regulation D exemption, which lets companies raise money without registering with the SEC, as long as they stick to accredited investors or small, private sales. 

Zak Folkman, one of the project’s founders, said this decision comes down to the regulatory uncertainty around token sales in the U.S., where the Securities and Exchange Commission often treats these tokens as securities.

Sales to U.S. residents will require verification as accredited investors, while non-U.S. buyers may face other restrictions, though how they can participate remains unclear.

WLFI will be a non-transferable “pure governance tokens”, offering holders the ability to make proposals and vote on matters related to the platform that promises to leave “slow and outdated banks behind.” 

Around 63% of the total token supply is set aside for public sale, with 17% allocated for user rewards and 20% reserved for the team and its advisers. While Folkman did not disclose the total supply of the token, he said the distribution would be “incredibly fair,” adding that there would be no pre-sales or early buy-ins with discounted allocations for venture capitalists.

A launch date for the token launch is yet to be disclosed.

Trump silent about WLFI

Trump, who had previously teased the project on multiple occasions, refrained from directly discussing it but focused instead on broader topics related to crypto policy and the potential of digital assets within the U.S. economy.

“Crypto’s one of those things we have to do, whether we like it or not,” he said during his time as speaker, adding that the sector is “big and yet it’s a fledgling compared to what it will be.”

Other members of the Trump family participated in the discussion. Donald Trump Jr. stated that he views DeFi as a means to bring “fairness to the financial system,” aligning with what he believes “our founding fathers intended.” 

Eric Trump chimed in, saying DeFi needs to be way more user-friendly, sharing his own struggles navigating decentralized platforms like Aave.

Concerns remain

As previously reported by crypto.news, there were initial concerns that 70% of all WLFI tokens would be reserved for insiders, including Trump. However, with that number now clarified at 20%, those concerns have eased somewhat, though some doubts still linger over the project’s security, specifically, the involvement of Chase Herro, one of the project’s leaders.

His last venture, Dough Financial, a lending platform similar to Aave, JustLend, and Spark, hit a peak of $3.2 million in assets before an exploit drained over $2 million. Now, Dough is nearly inactive, with just $9,747 in total value locked per Defilama.

To address security concerns, the WLFI team has enlisted top-tier security firms like PeckShield, Zokyo, and BlockSecTeam to audit and safeguard the platform. Further, the team disclosed the project’s code has been thoroughly reviewed by these experts to prevent any vulnerabilities.

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DeFi

Financial freedom or false promises? Experts weigh in on the truth behind Trump’s World Liberty Financial

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Will Trump’s involvement in World Liberty Financial attract more investors, or will it increase the scrutiny on a project that is already raising eyebrows due to its controversial token distribution and governance? Experts weigh in.

Trump strikes again

2024 has been a whirlwind for former President Donald Trump, with his name frequently making headlines — not just for his political ambitions but also for his growing interest in crypto. The latest buzz? His newest venture — World Liberty Financial, which is set to officially launch on Sep. 16.

World Liberty Financial is positioned as a platform aimed at empowering everyday people by giving them more control over their finances. 

A recent podcast appearance by Trump confirmed the launch date, with WFL’s X page following up with an announcement: a live event from Mar-A-Lago on September 16 at 8 PM EST, where Trump will unveil the project’s vision for “making finance great again.”

Reports suggest that Trump has assumed the title of “Chief Crypto Advocate,” while his sons, Eric Trump and Donald Trump Jr., serve as “Web3 Ambassadors.”

The project’ goal is to disrupt the traditional financial system and offer decentralized finance as an alternative. However, skeptics are questioning whether this is a genuine attempt at financial innovation or simply another branding exercise by the Trumps to leverage their fame.

Concerns have also surfaced about the project’ legitimacy. Zachary Folkman and Chase Herro, both tied to the platform’ operations, were previously involved in Dough Finance—a blockchain app that was hacked recently.

So, what is World Liberty Financial really aiming to achieve? Will it live up to its promises, or is it just another play on Trump’ reputation? Let’s dive into the controversies and what industry experts are saying about this bold new crypto platform.

Behind the scenes of World Liberty Financial

World Liberty Financial, on the surface, promises big things—decentralization, financial freedom, and turning the U.S. into the “crypto capital of the planet.” But when you dig a little deeper, things start to look a bit murky.

CoinDesk recently obtained a leaked draft of the project’ white paper, and it raises some eyebrows. While World Liberty Financial may preach power to the people, the numbers suggest otherwise.

According to CoinDesk, a staggering 70% of WLFI—the governance token of the project—will be held by the founders, team members, and service providers. 

Only 30% is expected to be available for public sale, and even that isn’t fully going to the public. Some of the money raised from the sale will be funneled back to project insiders, with a portion set aside in a treasury to support WLF’ operations.

Moreover, the project’ plans appear to be far from finalized. A source close to the project told CoinDesk that while a draft white paper exists, the team is still figuring out the details.

“We’re not quite sure which version you are referring to,” said a representative of World Liberty Financial, noting that the official details would be released via their social media channels like Twitter (X) and Telegram.

In a recent X post on Sep. 4, World Liberty Financial made bold claims about its future, stating, “Our plan will speak for itself. The brightest minds in crypto are backing us, and what’s coming will make all doubters think twice.”

Another controversy revolves around the governance of WLFI tokens. According to the white paper, all tokens will be non-transferable and locked indefinitely unless protocol governance procedures unlock them.

But even this comes with legal caveats, as the white paper mentions that purchases will be screened to ensure they comply with U.S. sanctions laws.

Interestingly, the white paper refers to FinCEN, a U.S. Treasury Department office focused on financial crimes, but the reference seems to be an error. It should likely refer to the Office of Foreign Assets Control (OFAC), which enforces economic and trade sanctions.

Supporters of Donald Trump within the crypto community are also cautious. While they see potential in Trump’ pro-crypto stance, some worry that World Liberty Financial’ structure could backfire, especially if it turns out to be more about enriching insiders than creating a decentralized financial system for all.

WLF addresses concerns and social media reactions

In a recent X thread, WLF addressed the swirling rumors around its project, offering a mix of lofty promises and defensive remarks. 

As expected, WLF is framing itself as an innovative force in crypto, claiming that what it is building will have an impact not just on DeFi, but also on the future of the U.S. economy, especially with the upcoming elections. 

WLF highlighted its partnership with security firms such as Zokyo and PeckShield, a move that signals their awareness of the risks in DeFi. Given that DeFi projects are frequent targets of hacks, with millions lost each year, this could be their way of reassuring investors. However, their claim that “our code has been thoroughly reviewed” might not be enough to erase concerns. 

The thread also shed light on WLF’ mission to push the U.S.-pegged stablecoins as the world’ settlement layer, ensuring the dollar’ dominance for the next century. This idea of “crypto as the savior of the U.S. dollar” is ambitious, but some might find it overreaching. 

Stablecoins have been growing in importance, yes, but the claim that they will ensure the U.S. dollar remains the backbone of global finance is a long shot, especially given regulatory crackdowns and international resistance to U.S. financial influence.

The mention of foreign nation-states “attacking” the dollar adds a layer of political posturing to WLF’ financial goals. While it’s clear that WLF is trying to tap into nationalist sentiment to boost its project, experts will likely be watching closely to see how this narrative unfolds—and whether it gains traction.

While WLF’ Twitter thread paints a picture of confidence, the crypto community remains divided. 

Nic Carter, a well-known figure in the space, raised key concerns. He questioned whether WLF could actually damage Trump’ electoral prospects, highlighting the risks of it being hacked or targeted by the SEC. He described it as “at best an unnecessary distraction, at worst a huge embarrassment.” 

His worries aren’t unfounded—any mishap with WLF could become political fodder, and given the uncertainty surrounding its tokenomics and legal standing, it’s a valid concern.

On the other hand, supporters like Steve Witkoff see WLF as an opportunity for financial inclusion. Witkoff likened it to his own entrepreneurial journey, explaining how he once relied on a personal loan from his father to start his business. 

In his view, WLF’ DeFi platform could open doors for those locked out of traditional credit systems. “Our credit markets are the best in the world,” he said, “but still lock out many from borrowing.”

Ambition meets controversy – what experts are saying

As the dust settles around World Liberty Financial, the stakes couldn’t be higher. To understand the potential impact, crypto.news reached out to industry experts, and their responses were anything but sugar-coated.

Adam O’Neill, Chief Marketing Officer at Bitrue, weighed in on the implications of the Trump family’ sudden plunge into the crypto world.

“The Trump family launching their own crypto project through World Liberty Financial sends a clear message that crypto is on their agenda, and they’ll be looking to guide and nurture their project and the industry as a whole—at least on the face of it.”

However, O’Neill wasn’t about to let early controversies slip by unnoticed. He pointed out that the initial optimism is already being overshadowed by red flags surrounding the project.

“Even though so much of WLF is still shrouded in mystery, it’s already mired in controversy, with several hacks and scam campaigns causing monetary losses. The fact that 70% of the tokens are being held by insiders raises alarms—it feels more like an attempt to cash in on hype rather than a serious venture into the crypto world.”

That skepticism is shared across the industry. Yuriy Brisov, Partner at D&A Partners, didn’t hesitate to raise concerns about the concentration of power behind the project. For a platform touting decentralization, the numbers tell a troubling story.

“Seventy percent of WLFI tokens allocated to insiders contradicts the very principle of decentralization. It opens the door to market manipulation and suggests this project isn’t about revolutionizing finance — it’s about benefiting a select few.”

Brisov went even further, digging into the political implications of Trump’ involvement. Could this project become an ethical minefield if Trump returns to the presidency?

“World Liberty Financial raised red flags from day one. If Trump is elected, his family’ involvement in WLF could lead to massive ethics violations. This may spark new rules around conflicts of interest for political figures involved in crypto.”

With Trump’ name tied to it, World Liberty Financial could end up influencing more than just the markets—it could sway votes too. Suraj Sharma, Global Head of Public Policy at BitBNS, warned that the project might be a double-edged sword for Trump’ campaign.

“World Liberty Financial’ association with Trump could be a double-edged sword. While it might rally pro-crypto voters who see Trump as a champion of innovation, the regulatory scrutiny and security concerns tied to the project could reflect poorly on his governance style, especially his perceived leniency on oversight.”

O’Neill echoed this sentiment, cautioning that the controversies could severely damage both the project’ credibility and Trump’ image.

“For many investors, digital assets are their pathway to financial security. But with such a high level of insider control and the controversies swirling around WLF’ security flaws, the alarm bells are already ringing. This could seriously damage the project’ credibility.”

While the political and financial stakes are clear, the technical underpinnings of the project leave much to be desired. Mehow Popieszalski, CEO of MatterFi, critiquing the leaked whitepaper, offered a blunt assessment of the project’ innovation.

“The leaked whitepaper shows this is just an Aave on ETH project with some cut-and-paste coding. For something backed by a former president, it’s disappointing. We should be seeing groundbreaking technology, not recycled ideas. Trump’ brand might bring attention, but without serious tech innovation, this project risks becoming another failed DeFi experiment.”

As concerns mounted, Brisov once again referenced the potential legal challenges ahead. The structure of the project, he said, could draw serious regulatory scrutiny from U.S. authorities.

“The non-transferable tokens with a revenue-sharing model will likely be classified as unregistered securities. This could put WLF squarely in the crosshairs of the SEC, resulting in enforcement actions or fines.”

Adding to the legal complexities is the project’ murky approach to KYC and AML compliance. Brisov was quick to call out the risks associated with inadequate regulatory measures.

“Without stricter compliance measures, WLF risks violating existing financial regulations, leading to broader regulatory crackdowns in the DeFi space.”

With these mounting concerns, Sharma circled back to the potential political consequences. Trump’ deep involvement in WLF, he suggested, could alienate key voter demographics.

“While Trump’ core supporters might embrace the project, a large portion of the electorate could see this as a conflict of interest. The already blurred lines between business and politics only get murkier with WLF.”

Popieszalski offered a reminder of the technical challenges ahead, warning that hype alone won’t carry World Liberty Financial to success.

“A project of this scale needs a world-class team of crypto experts, yet what we’re seeing is a group with ties to failed DeFi ventures. That doesn’t inspire confidence, especially when you factor in the risks Trump’ name brings. If this project wants to succeed, it needs to deliver more than hype—it needs real, innovative solutions.”

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DeFi

Trump teases launch date for crypto project to ‘leave outdated banks behind’

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Former President Donald J. Trump is teasing the launch date of his sons’ new crypto project dubbed “World Liberty Financial.”

Donald Trump is teasing the upcoming launch of World Liberty Financial, a crypto project his family has been promoting over the past few weeks.

In a video posted on his X account on Sept. 12, Trump called on his followers to join him for a live Twitter Spaces event on Sept. 16, where he plans to officially unveil World Liberty Financial.

“We are embracing the future with crypto and leaving the slow and outdated big banks behind.”

Donald J. Trump

The teaser follows growing speculation about the Trump family’s involvement in the crypto space. In early August, Donald Trump Jr. and Eric Trump hinted at upcoming crypto-related developments, with both suggesting that the family had significant plans to enter the market.

These hints were later confirmed, when reports surfaced saying that the Trump-backed venture will likely be built on Aave, a decentralized finance platform, and Ethereum’s blockchain. The project will reportedly focus on creating a “credit account system” while driving the adoption of stablecoins.

Security has been highlighted as a primary concern for World Liberty Financial, as the team behind the project is working with top-tier security experts, including PeckShield, Zokyo, and BlockSecTeam, to ensure the platform’s safety. According to an alleged official Telegram channel, the project’s code has been “thoroughly reviewed” by industry leaders to prevent security vulnerabilities.

The timing of the announcement also coincides with an incident earlier in September when Lara and Tiffany Trump’s X accounts were hacked, posting about a token purportedly associated with World Liberty Financial.

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Bitcoin

Bitcoin to hit six figures regardless of who wins US election, Swan Bitcoin says

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Despite the partisan divide in crypto, many investors believe Bitcoin will reach six figures regardless of the U.S. presidential election outcome.

Bitcoin (BTC) is poised to reach six figures over the long term, no matter who wins the U.S. presidential election, according to Steven Lubka, head of private clients and family offices at Swan Bitcoin.

Amid growing political polarization in the cryptocurrency industry, many investors now believe Bitcoin will continue to thrive, even as optimism from former President Donald Trump‘s pro-crypto statements fades. In an interview with CNBC, Lubka said he still “certainly” believes that Bitcoin will surpass the $100,000 mark by 2025.

“Do I think we will be in the six figures regardless of who wins? Almost certainly.”

Steven Lubka, head of private clients and family offices at Swan Bitcoin

Concerns that a Kamala Harris presidency could drive the price of Bitcoin lower are likely overstated, per James Davies, co-founder of Crypto Valley Exchange.

He noted that while crypto startups may face challenges under such a scenario, the broader industry will still thrive. Davies also stressed that Bitcoin is a global commodity, with its price driven more by macroeconomic forces than domestic political events, adding that crypto “needs to lobby both sides, align with both sides and succeed regardless of the election.”

Following the Sept. 10 debate between Donald Trump and Kamala Harris, their odds are now tied on the prediction platform Polymarket, with both candidates holding 49% winning odds. As crypto.news reported, Trump had previously seen his chances rise to 72% in July after attending the Bitcoin 2024 conference in Nashville, which sparked optimism among pro-crypto voters.

The debate triggered bearish momentum in the crypto market, with the global crypto market cap dropping nearly 2%. Despite the election speculation, analysts agree that Bitcoin’s price will be more influenced by macroeconomic trends than political events.

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DeFi

Congress battles over DeFi, while Trump’s silence speaks volumes

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As Democrats and Republicans argue over DeFi, what message does Trump’s silence send to the crypto community? Is it a sign of disinterest or strategic neutrality?

DeFi gets the spotlight

On Sep. 10, the first-ever Congressional hearing on decentralized finance took place, marking an important moment in the evolution of this technology.

Titled “Decoding DeFi: Breaking Down the Future of Decentralized Finance,” the hearing was led by Congressman French Hill and lasted nearly two-and-a-half hours. 

U.S. lawmakers gathered to discuss both the potential benefits and risks that DeFi could introduce to the financial system.

The hearing exposed a clear divide among lawmakers. Republicans, led by Hill, were optimistic about DeFi’s ability to remove intermediaries and transform financial markets. 

As Hill stated, “by substituting intermediaries for autonomous, self-executing code, decentralized finance can shift the way financial markets and transactions are currently structured and governed.”

Meanwhile, Democratic lawmakers raised concerns, focusing on DeFi’s potential misuse, particularly its role in enabling criminal activity. While Republicans called for lighter regulations, Democrats advocated for stricter oversight, citing the risks of illicit use.

What does this hearing mean for the future of DeFi and the broader crypto market, especially with the U.S. presidential elections approaching?

A clash of perspectives on DeFi

The hearing itself turned into a battlefield of opinions, with sharp contrasts in how lawmakers viewed DeFi. The subcommittee chair, Hill, kicked off the discussion by focusing on the opportunities DeFi and tokenization could offer to finance.

However, not everyone saw it that way. Congressman Brad Sherman, a Democrat from California, took a more critical approach. He expressed concerns that DeFi might be nothing more than a tool for tax evasion, especially for the ultra-wealthy.

What we have here is an effort to liberate billionaires from income taxation… Every time a billionaire successfully cheats on his taxes, a member of the Freedom Caucus earns his wings.

In response to Sherman’s concerns, Peter Van Valkenburgh, director of research at Coin Center, provided a counter-argument. He acknowledged that tax evasion is a crime but pointed out that DeFi’s transparent, decentralized ledger makes it difficult for bad actors to hide their activities.

Tax evasion is a crime. It should be aggressively policed. I do not, however, think that tax evasion and its existence warrants a 100% surveilled and controlled financial system.

Van Valkenburgh also pointed out the confusion surrounding tax guidance from the IRS. He argued that many crypto users want to comply with tax laws but lack clear instructions on how to do so.

A difficult area in the cryptocurrency space has been getting clear tax guidance from the IRS on how Americans can pay their taxes when they earn capital gains, or perhaps their wages, on these networks

He added that criminals are more likely to use traditional financial systems to hide illicit funds rather than transparent blockchain networks.

On the other side, Mark Hays, Senior policy analyst at Americans for Financial Reform, painted DeFi in a less favorable light. He described the space as volatile and rife with scams, where investors often face devastating losses.

Hays stressed that DeFi should not get a free pass and that existing securities laws should apply to decentralized systems to protect investors.

Meanwhile, Amanda Tuminelli, the chief legal officer at DeFi Education Fund, took a different approach. She highlighted DeFi’s potential to democratize finance. According to Tuminelli, traditional financial systems rely on intermediaries, often acting as gatekeepers.

“Big banks can and do deny access to the system for discriminatory reasons or no reasons,” she stated, contrasting this with DeFi’s open-access nature. She suggested that anyone with an internet connection can use DeFi, calling it “the epitome of financial inclusion.”

Tuminelli argued that treating DeFi as traditional finance is not the right approach, as the underlying structures are fundamentally different. She suggested that regulations should take into account the self-custodial nature and transaction anonymity of decentralized systems.

Crypto left out of the presidential debate spotlight

Vice President Kamala Harris and former President Donald Trump faced off on Sep. 10 in the second presidential debate of the 2024 election. Despite Trump’s well-known pro-crypto stance, the debate avoided any mention of crypto entirely.

Instead, the focus was on traditional economic issues, with no reference to crypto, blockchain, or broader financial technology topics.

Harris’ strong performance during the debate appeared to unsettle Trump, particularly as he struggled to defend his position on contentious issues like abortion.

All of this seemed to affect the crypto market, as Bitcoin (BTC) dropped from around $58,000 to $56,000 after the debate. As of Sep. 11, it has slightly recovered, hovering around $56,800.

Ethereum (ETH), the second-largest crypto by market cap, also experienced a minor dip of about 0.5%, trading at around $2,340 during the same period.

In a surprise for Trump, who has long positioned himself as a champion of deregulated financial markets, his odds of winning, according to online betting platform Polymarket, fell from 52% before the debate to 50% as of this writing.

Meanwhile, a CNN flash poll reflected Harris’ dominance, with 63% of viewers stating she outperformed Trump. However, most respondents noted that the debate wouldn’t influence their vote in November.

As the campaign continues and the demand for a third debate grows, it remains to be seen whether crypto will finally take center stage.

What to expect next?

Throughout the Biden administration, Democrats have consistently been skeptical of crypto, highlighting the risks and pushing for stronger regulations. Amid this, Vice President Kamala Harris has remained silent on the issue, making her stance unclear.

Meanwhile, Trump, who once strongly opposed crypto, has shifted his tone in an effort to attract pro-crypto voters. In recent months, Trump has shown more openness toward blockchain and crypto on several instances. 

However, like Harris, he has remained silent when it matters most, such as during the Trump vs. Musk Twitter space conversation in August and again during the second presidential debate, where crypto was notably absent.

The future of crypto and DeFi in the U.S. remains uncertain. With the upcoming election, how the next administration handles this growing sector could have a lasting impact on both innovation and regulation in the financial space.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
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