Crypto Market and the US Election: Opportunities and Risks Coexist

As the U.S. presidential election approaches, the crypto market is at a critical crossroads. This article aims to explore the potential impacts of the upcoming election on various types of crypto assets, including encryption concept stocks, regulation-related tokens, NFTs, and Meme coins. We will conduct an in-depth analysis of the current market performance, investment potential, and associated risks, providing reference for investors seeking potential opportunities in this volatile market.

Crypto Concept Stocks: The New Stars of Traditional Financial Markets

1. Mining: A New Frontier for Bitcoin in the United States

After China shut down mining farms, the United States has become a new paradise for Bitcoin mining, accounting for the vast majority of hash power. Some politicians have stated that Bitcoin mining could be the last line of defense against central bank digital currencies ( CBDC ), hoping that all Bitcoin can be produced in the United States to help maintain the country's energy dominance.

In the mining companies, CleanSpark and Core Scientific stand out, showing strong momentum in both market capitalization and growth rate. In contrast, Riot Platforms' performance appears somewhat lacking.

2. Coinbase and MicroStrategy: Leaders in the encryption sector

Coinbase and MicroStrategy have become representative companies in the crypto market.

MicroStrategy has aggressively purchased Bitcoin over the past four years, holding 226,331 Bitcoins as of June 24, 2024, with an average purchase price of $35,158. The stock price performance of MicroStrategy is highly correlated with the price of Bitcoin, often exhibiting greater volatility than Bitcoin itself.

As a domestic cryptocurrency exchange in the United States, Coinbase's stock price has risen by 168% over the past year, reaching $265, slightly outperforming Bitcoin. Some analysts believe that there may be increased regulatory pressure on foreign crypto companies in the future, which could present more market opportunities for Coinbase.

Crypto project ( regulatory related )

Market rumors suggest that the current chairman of the United States Securities and Exchange Commission ( SEC ) may resign in early 2025. If there is a change in administration, the new SEC chairman may adopt a more favorable attitude towards the crypto market, which would bring new opportunities to the market.

1. Projects that may receive regulatory relief

XRP(Ripple): The legal dispute with the SEC has lasted for years, and the market is highly concerned about its future direction.

Solana(SOL): Previously defined as a security by the SEC, its ETF application is currently under review. If the new chairman has an open attitude, the likelihood of SOL being approved will greatly increase.

2. Tokens classified as securities by the SEC

A total of 19 projects have been recognized as securities by the SEC, and the prices of these tokens have been suppressed to a certain extent by regulation. If this recognition can be revoked in the future, it would be a significant positive factor and could trigger a new bull market.

NFT Market: Political Figures Series

Some political figures plan to launch the fourth NFT series. The previously issued series includes:

1. Superhero Series Cards: The current average transaction price is about 0.1 ETH. Whenever a new related hot event occurs, the trading volume of this series will increase.

2. Superhero Series Phase Two: The price is around 60 USDT, but the liquidity and upside potential are not as good as Phase One.

3. Gold Card Series: As a special edition, it is produced in limited quantities and is expensive, but the recent trading volume is low.

Overall, the first series of NFTs may be a better investment choice. However, the current performance of the NFT market is poor, and liquidity is far less than that of encryption. Investors need to carefully assess risks and allocate investment ratios reasonably.

Meme Coin Craze

Meme coins are closely related to the US election events, mainly divided into two categories:

Celebrity Meme Token

The price trends of tokens such as MAGA TRUMP and JEO BODEN are closely linked to the actions and news developments of the corresponding public figures. These types of tokens exhibit high volatility and are prone to significant short-term fluctuations driven by events.

Election Event Meme Token

Terms like PEOPLE, MAGA Hat, FIGHT, and Fear not are typically driven by significant events and carry strong speculative and uncertain characteristics.

Overall, Meme coins related to specific political figures, such as MAGA TRUMP and MAGA Hat, may have a higher chance of significant price increases in the future. However, investors should be cautious; small position short-term trading may be a wiser choice.

Potential Risk Warning

Historical experience shows that there is often a gap between politicians' campaign slogans and their actual governance measures. For example, the current SEC chairman was seen as crypto-friendly before taking office, but has actually pushed for stricter regulatory measures.

The authenticity of certain political figures' statements is questionable, as they have publicly opposed encryption in the past. Moreover, encryption is not a key issue in their campaign promises, and even if elected, they may not necessarily implement relevant commitments. This policy uncertainty is a significant risk factor that investors must take seriously.

Conclusion

As the U.S. elections approach, sentiment and policy direction in the crypto market will become key factors influencing investment decisions. Although there are still significant speculative expectations in the market, investors must remain calm and rational. It is especially important to be wary of potential inconsistencies in politicians' words and actions and sudden policy changes.

In summary, the crypto market presents both opportunities and risks. Investors should carefully assess their risk tolerance and make prudent decisions in order to navigate this volatile market steadily.