Analysis of the Potential Impact of the US Election on Encryption Assets

This article delves into how the upcoming US elections will impact various types of encryption assets, including crypto concept stocks, regulatory-related tokens, NFTs, and Meme coins. The report analyzes current market performance, investment potential, and associated risks, aiming to assist investors in identifying potential opportunities in a turbulent market.

Encryption Concept Stocks

1. Mining: encryption of the American Dream

After the shutdown of mining operations in China, the United States has taken over the vast majority of Bitcoin hashing power, becoming a new paradise for Bitcoin miners. In June of this year, a politician stated that Bitcoin mining could be the last line of defense against CBDCs, hoping that all remaining Bitcoins are produced in the U.S. to help the country maintain energy dominance.

Several Bitcoin mining tycoons were invited to attend a meeting. According to the executive chairman of a Bitcoin mining company, attendees were informed that politicians understand and support encryption, believing that Bitcoin miners contribute to stabilizing the energy supply of the power grid.

In the mining companies, CleanSpark and Core Scientific have performed outstandingly, with significant increases in both market value and growth. In contrast, Riot Platforms has performed slightly worse.

2. Coinbase and MicroStrategy: Leaders in the encryption world

MicroStrategy (MSTR)

MicroStrategy was originally a slow-growing enterprise software company, but over the past four years, it has made large purchases of Bitcoin. As of June 24, 2024, it holds 226,331 Bitcoins, with an average purchase price of $35,158 and a total cost of $7.538 billion.

MSTR has outperformed BTC in market performance over the past four years, highly correlating with BTC's ups and downs, acting as an amplifier for BTC's returns. In a bull market, it rises more, and in a bear market, it falls harder.

Coinbase (COIN)

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. However, it is still below its historical high of $429.54. There may be increased pressure on foreign cryptocurrency companies in the future, which gives Coinbase an opportunity to capture the market.

encryption project ( regulatory related )

According to reports, the current chairman of the U.S. Securities and Exchange Commission is expected to resign in early 2025. Market analysts believe that if a new president is elected, the new SEC chairman could be the chief legal officer of a trading platform and a former SEC commissioner.

The current chairman has always been seen as one of the main resistances in the encryption market, and the strict regulation under his leadership by the SEC has suppressed the prices of many tokens. If the new chairman has a more friendly attitude, the encryption market will welcome a more favorable policy environment.

1. Possible pressure relief projects

XRP(Ripple): The lawsuit between Ripple and the SEC has lasted for years, with each step affecting market fluctuations.

Solana(SOL): SOL was previously defined as a security by the SEC. Currently, the ETF for SOL has been submitted for review, and if the new chairman maintains an open attitude, the probability of approval will greatly increase.

2. List of tokens classified as securities by the SEC

A total of 19 projects have been identified as securities by the SEC. The performance of these tokens in recent years reflects the diversity of the market under regulatory pressure. Their prices have been somewhat suppressed by the SEC's classification as securities, and if this classification is later revoked, it would be a significant positive development, potentially signaling a new bull market.

NFT Issuance and Sales: Politician Series NFT

According to reports, a certain political figure plans to launch a fourth NFT series. The previous series was said to be "very successful," selling out within a day.

1. Superhero Series Cards

The average transaction price of this series of NFTs is about 0.1 ETH. Although it was once quiet, it has been heated up again following the announcement of a new round of NFT plans, showing strong relevance to current trends.

2. Superhero Series Issue 2

The price is about 60 USDT, and the liquidity and upward potential are not as good as the first phase.

3. Golden Card Series

As a special edition, it is scarce and expensive, but there has been no trading volume in recent months. This raises two thoughts:

• Lack of popularity, everyone prefers the first edition NFT
• There is value but no market; holders are optimistic about long-term value and wait for the right opportunity to enter the market.

Overall, the best investment choice for NFTs is still the first series. Historical data shows that whenever relevant trending events occur, the trading volume of that series increases.

However, the current NFT market is overall sluggish, with liquidity far inferior to that of encryption currencies. Investors should cautiously assess their risk tolerance, reasonably allocate their investment proportions, and avoid falling into uncertain predicaments.

Popular Meme Track

Meme coins are closely related to the events of the US elections. This article only lists a few of the more influential meme coins.

Celebrity Meme Token

These tokens are closely associated with specific individuals. For example, the price trends of certain tokens are highly correlated with the actions and news movements of corresponding public figures. Such Meme coins tend to fluctuate significantly due to the influence of these individuals and are prone to short-term drastic changes driven by events.

Election Event Meme Token

The price trend of event Memes is usually driven by major events, characterized by strong speculation and uncertainty. For example:

• PEOPLE and MAGA Hat: These tokens often experience explosive growth after significant political or social events, usually controlled by behind-the-scenes funding.
• FIGHT and Fear not: As soon as a conspiracy theory related to a certain political figure emerges, these tokens quickly become popular in the market. However, the current trend is weak, and the future market performance remains to be seen.

Overall, the Meme coin sector claims to be related to the entire election, but in reality, it is more focused on specific individuals. Market trends indicate that Meme coins related to these individuals and events, such as MAGA TRUMP and MAGA Hat, are likely to ride the wave of traffic in the future, resulting in greater price increases.

Investment should be cautious. When participating in these highly volatile Meme coins, small position short-term trading might be more rational.

Potential Risk Warning

Historical lessons indicate that campaign slogans often do not align with actual governance measures. Take the current SEC chair as an example; before taking office, they were seen as an encryption supporter for teaching blockchain courses at a certain university, but after joining the SEC, especially following a certain exchange incident, they quickly changed their stance and pushed for stricter regulation.

According to neutral media data, the overall authenticity of statements made by a certain political figure is less than 30%. He has previously made it clear that he is not friendly towards encryption currencies, even calling Bitcoin a "scam" and calling for increased regulation. More notably, encryption currencies are only a secondary issue in his campaign promises, and even if he wins, he may not necessarily implement those promises. This policy uncertainty is a significant risk factor that investors must pay attention to.

Summary

With the changing policies of the United States regarding Bitcoin mining and encryption regulation, coupled with frequent statements from relevant figures, the volatility of various assets has significantly increased. Investors must remain calm and rational, aware of the potential inconsistency in politicians' words and actions as well as sudden policy changes. History shows that there is often a gap between campaign promises and actual governance, and this uncertainty is a risk that market participants must confront.

Although there are many opportunities in the encryption market, investors should carefully assess their risk tolerance and make prudent decisions to seek steady progress in this unpredictable market.