The impact of Trump’s election on the crypto market

In a previous article, I shared my views on the impact of Trump's election on the entire crypto ecosystem.

During Saturday's online exchange, another reader asked a similar question. At that time, I added two points from the perspective of crypto projects about the impact that Trump's election may have on crypto projects.

This impact may lead to obvious differentiation in the financing and operation methods of projects of different sizes in the future.

If Trump can really fulfill his pre-election promise to the crypto ecosystem, then in general, the crypto ecosystem and its companies (projects) will face a much more relaxed environment than now in terms of major policies, which means that the following two activities will become more and more enthusiastic:

The first is that the traditional financial community will increasingly accept crypto companies, and even more and more capital will seek opportunities in the crypto ecosystem. This mainly affects large projects within the ecosystem, especially those infrastructure or underlying application projects.

Second, companies or project parties that are already in the crypto ecosystem will have more motivation and enthusiasm to make some bold and tentative actions, such as issuing tokens. This mainly affects small and medium-sized projects in the ecosystem, especially some innovative application projects.

Let's look at the first point first.

In recent years, the traditional financial sector in the United States has increasingly accepted the crypto ecosystem under the leadership of capital led by large institutions (such as BlackRock).

This acceptance not only means that they have made a 180-degree change in their values ​​​​towards crypto assets, but also reveals the institutions' considerations in real interests-----------they do not want to miss the financial benefits that may be generated by crypto companies and crypto assets during their growth.

In the past, they were still hindered by the attitude of the US Securities and Exchange Commission, and could only take small steps to test and take two steps forward and one step back. Now, with a president and vice president who clearly support the crypto ecosystem (let’s not forget that Vance worked in the venture capital industry before running for office, and was close to Silicon Valley elites, and his own assets include Bitcoin; not to mention that Trump himself has issued several rounds of NFTs and is still operating a new crypto project), how can institutions miss such an opportunity?

Recently, a very interesting phenomenon has appeared in my circle of friends. Some people are frequently sharing news about two crypto companies preparing to go public:

One ​​is Circle (USDC’s parent company), and the other is Kraken.

At the end of the message sharing, the sharer noted this PS: Friends who are interested in participating in the private placement, please contact us in the small window. The shares are limited, so hurry up.

In addition to these two companies, there are also frequent reports that Wintermute, a well-known large market maker in the ecosystem, is preparing to go public. It is said that a domestic Internet giant has participated in Wintermute's financing.

I think it is not accidental that these big project parties have revealed the news of listing at this time, but a phenomenon that is bound to occur at the current stage of ecological development.

I think there are mainly three reasons:

First, with the development of the crypto ecosystem to the present, a considerable number of large projects can no longer use the previous 1CO niche financing method to solve the problem. The amount of capital they need is getting larger and larger, and only traditional finance can solve their funding needs.

Secondly, the traditional way of issuing tokens to solve investor exits seems to be unfriendly to private equity investors in recent years. Lock-up restrictions, insufficient liquidity and other constraints have greatly restricted their profit exits. Now, even retail investors don't play with them. They would rather play meme coins than capital coins. So these investors must think of other ways to cash out.

Furthermore, due to various restrictions in the past, the resistance to the listing of native crypto companies was very large. For so many years, the only truly native crypto company listed on the US stock market, except for mining companies and MicroStrategy, is Coinbase. Even Coinbase, the only one, has been harassed and questioned by the SEC after its listing.

The first two reasons will lead to the traditional financial market becoming more and more a channel to solve the problems of both parties, but this channel is ruthlessly blocked by the third reason.

Now that Trump is about to take office, the obstacle between the two parties is likely to be removed.

So in the foreseeable future, more and more crypto companies or projects with high capital requirements, especially those that require a lot of capital investment in scientific research and operation, may choose to go public-------This will not only facilitate these companies to raise large amounts of funds, but also facilitate traditional financial institutions to quickly and efficiently obtain benefits from the crypto ecosystem.

In the future, the relationship between such companies and our retail investors will become smaller and smaller. Because taking this path means that the probability of these projects issuing coins will become smaller and smaller, and even if they do, it will probably be a drop in the bucket. Although they are dressed in the cloak of encryption, they are more like traditional companies.

But on the other hand, as the crypto environment becomes more relaxed, I believe that more and more small and medium-sized projects, especially innovative projects, will have a greater chance of issuing coins. Issuing coins is an efficient means for small projects to start quickly.

This is the second point I mentioned above: "Enterprises or project parties that are already in the crypto ecosystem will have more motivation and enthusiasm to make some bold and tentative actions, such as issuing tokens."

Recently, Polymarket, which has been in the limelight in this election, has announced that it will issue coins.

I think this is the project party betting that the crypto industry will soon usher in a certain degree of relaxation. There will be some such opportunities in the future, but they are mainly limited to some small innovations and small applications.

Because they do not need large capital and large investment in the initial stage, what they need is popularity and participation. And airdrops and coin issuance expectations are the best incentives.

Therefore, we retail investors can pay proper attention to some active and emerging small applications and find some opportunities that belong to us in them.

However, I still suggest that you should consider your own time, energy and financial resources when participating in these small applications, and do what you can, and don't bet everything on one thing.

The era of betting everything on one thing or even setting up a studio to fight for any project airdrop is gone forever.