Introduction
Since our blog “Implications of the 2024 Election on Web3: What to Expect on Tuesday” was released, the cryptocurrency market has changed in an unprecedented manner. However, was this drastic spike unforeseen? No, not entirely. After the 2024 Election on November 5th, which saw Donald Trump reelected as President of the United States, the market has been extremely bullish, with record highs, familiar faces taking power, and more people entering the market. For those looking to understand the changes and how they can be part of the action, this entry is for you.
Election Impact
The mere election of Trump is not what has sparked this run, but was more so caused by what the election symbolizes: a new era of deregulation for a market created around the idea of decentralization. One such action, or rather a pledge to the action, to move towards a pro-crypto environment was Trump’s announcement that he would fire Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), on his first day in office. He made the announcement when he spoke at The Bitcoin Conference this past summer, which displayed his commitment to being pro-crypto (Evans), as Gensler has been historically anti-cryptocurrency during his tenure as chair, despite the approval of Bitcoin ETFs during his time in the position. However, Trump will not need to take action upon his words, as two weeks after the election, Chair Gensler announced he would step down from his position on Inauguration Day (SEC). Furthermore, announcements of appointments by Trump indicate he is surrounding himself with other pro-crypto individuals. The list includes Howard Lutnick, CEO of Cantor Fitzgerald, as commerce secretary; David Sacks, former executive at PayPal, as a new “White House A.I. & Crypto Czar”; and Elon Musk to run the proposed Department of Government Efficiency (DOGE, a nod to Dogecoin). These three, along with other appointments, spell pro-cryptocurrency policies for the next four years.
Market Reactions
As mentioned, cryptocurrencies have been on a tear since November 5th. By the numbers, various cryptocurrencies have either reached record highs, or have at least come close to numbers comparable to highs from 2021. Included in this is Bitcoin surpassing the $100K mark for the first time ever. The three largest coins by market cap (at the time of writing), Bitcoin, Ethereum, and XRP, are up 48%, 62%, and 372%, respectively, since Election Day. Similarly, Dogecoin is up 155% since, which could be linked to policy or to Elon Musk, who has historically promoted the coin, securing a position. This surge is on the heels of previous growth of the year, and extends the growing sentiment surrounding cryptocurrency. Research from more than 1,500 Americans revealed the extent to which the sentiment is evolving, with 10% more owners than in 2023, ownership among women growing by 11%, and a greater willingness of 21% non-owners to purchase cryptocurrencies after the approval of the Bitcoin ETF earlier this year (Blackstone). This may serve as an indicator of more people entering this relatively new space, and with that said, it is important that newcomers understand the market, which includes terminology often used in it.
Glossary
Blockchain – a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network (IBM)
Cryptocurrency – decentralized digital money designed to be used over the internet (Coinbase)
Cryptocurrency Exchange – digital marketplace that enables buyers and sellers to trade cryptocurrencies or other digital assets for fiat money or other cryptocurrencies (CoinMarketCap)
DeFi – an alternative to traditional financial institutions, decentralized finance offers a peer-to-peer (P2P) system to remove the need for institutions and other third parties
Fiat – refers to a government-issued currency that is not backed by a commodity (Chen)
Stablecoin – a type of cryptocurrency whose value is pegged to another asset (Coinbase) such as the US Dollar
Wallet – software or hardware that enables users to store and use cryptocurrency (Kerner) and can be used to make transactions
Lucrisma
For those looking to enter the market at this time, Lucrisma is uniquely positioned to ease the entry. We allow those expanding the number of accounts they own to keep easy access and manage, blending the two markets of centralized and decentralized finance, where you can view your preexisting bank account as well as your newly created wallet. Lucrisma provides an easy way to do so, as we support more than 300 wallets and numerous crypto exchanges. For anyone concerned about security in this new market, we encrypt and tokenize all financial data on the blockchain for enhanced security and integrity, and protect your data with bank-grade encryption from your device to our servers. Incorporating Lucrisma into your daily financial life will ease your management of all accounts and will provide new actions to be utilized in the near future.