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The bitcoin play
Here we go again.
Right now, one of the biggest narratives in crypto is political chatter.
I touched on this yesterday, when I unpacked Republican vice president hopeful JD Vance’s crypto stance. But it warrants a deeper dive.
Over the past couple of days, I’ve talked to a variety of folks about the upcoming election, where they stand, what this means, etc.
GSR co-CEO Rich Rosenblum told me he predicted a pro-crypto ticket would “give crypto the stage” and potentially force Democrats to take a hard look at their approach to the industry. But he had no idea just how pro-crypto the Republican ticket could be.
However, he also noted that the ticket is “also far more polarizing, given that Vance holds some far right views.”
The ticket itself is viewed as “extremely bullish” by Rosenblum (and some VCs including 2 Punks Capital’s Jacob Martin).
“With this much support so early, and the current administration continuing to be on their back feet, it ups the probability that the Republicans will sweep the Senate, and gain a bigger majority of the House. This would put them in a much better position to push forward pro crypto legislation and initiatives,” Rosenblum noted. “Vance is a staunch crypto advocate. He not only owns $250,000 of BTC, but volunteered it to the public, and was the first to subscribe to Trump’s pro crypto approach.”
In fact, we’re seeing some “Trump Effect” on crypto prices right now, Pedro Lapenta, Hashdex’s head of research, told me.
This effect is “highlighting the growing intersection of politics and digital assets. As the 2024 elections loom, investors and industry stakeholders continue to monitor these developments closely, anticipating further impacts to prices and the evolving crypto landscape,” he said.
The discourse about politics has also taken back center stage when it comes to crypto. Yesterday, Mark Cuban came out and explained that the Silicon Valley switch to support former President Donald Trump was actually a “bitcoin play.”
And then, just a few hours later, Vitalik Buterin published a blog explaining why he doesn’t believe people should be supporting candidates just because they’re pro-crypto.
“There is a growing push within the crypto space to become more politically active, and favor political parties and candidates almost entirely on whether or not they are willing to be lenient and friendly to ‘crypto,’” Buterin wrote.
Whew.
But big venture capitalists such as Marc Andreessen and Ben Horowitz, who have already said they plan to donate to a Trump super PAC, and other so-called tech bros might not be turning to Trump just for bitcoin, Rosenblum explained.
“I don’t think the richest leaders in tech are voting solely on what helps their BTC positions. But, it’s a reasonable claim from Cuban, given that a Trump/Vance ticket is sure to increase the probability of a BTC strategic reserve and other crypto initiatives. If they were to be voting for economic reasons, I think it’s more due to Trump’s support for innovation rather than just support for crypto,” he said.
Trump, while seemingly pro-crypto now, is also pro-innovation — and that includes AI.
“Generally players in tech have much bigger investments in AI than they do in crypto, so I think it would be more accurate to say that these leaders in tech are voting for Trump as a pro-business play, as he is volunteering views that are supportive of their industry,” Rosenblum continued.
All in all, though, Rosenblum thinks this “virtuous cycle of crypto boosting politics and politics boosting crypto is going to activate a flywheel of historic proportions.” We could even see a “crypto supercycle.”
“BTC and ETH are much easier to access now that they will both have ETFs, and this access will bring in new capital, and new awareness of the space. Long-time holders roll their positions into newer projects, which will fuel further innovation and adoption for the industry,” he added.
There’s no doubting the increased interest in the election now, take a look at this chart on Polymarket volumes. July has already surpassed June, and we’re only about halfway through the month.
We still have a few months before the election, but be prepared for this narrative to remain top of mind as the industry looks to chart a path forward.
It’s going to be a very interesting fall, that’s for sure.
— Katherine Ross
Data Center
- Polymarket’s monthly volume is already at an all-time high of $131.85 million, with two weeks left to go.
- Total volume for the year to date: $487.7 million.
- Polymarket betters put the odds of a Trump win at 65%, Kamala Harris 17% and Joe Biden 11%. There’s currently $273.5 million on the line.
- WLD, WIF and CORE lead the top-100 for weekly gains, between 50% and 32%.
- BTC and ETH are flat on the daily, hovering below $65,000 and $3,500.
Cryptocommander-in-Chief
If it wasn’t obvious before, it is now: Presidential favorite Donald Trump is a crypto influencer.
Trump is even expanding his suite of NFT collections, on track for his fourth, going by recent comments.
And why not? The first three raised millions of dollars through primary sales, although floor prices have lagged.
Those funds are apparently separate from the $3 million in crypto raised for his campaign last quarter from around 100 donors — just shy of 1% of the total contributions for the period, per WSJ.
The NFTs have a direct line to Trump (one collection even comes with a physical card containing a piece of his infamous “Mug Shot Suit”). But there’s also a bevy of unofficial Trump memecoins arguably more popular than the official NFTs.
MAGA is the biggest, launched mid-last year. The token, which has a market cap of $319 million, is now found in nearly 71,400 wallets split between Solana, Ethereum, BSC and Base — almost double the amount recorded in April.
Major events in Trump’s timeline over the past year have coincided with waves of new MAGA holders, whether positive or negative. The number of wallets containing MAGA jumped by 620 directly after his infamous mug shot last August, which was a lot at the time.
When the Supreme Court ruled Trump could be added to the California ballot in early March, more than 5,500 additional addresses began holding MAGA. That’s the largest surge of new holders so far.
Similar spikes in new holders were seen when Trump was found guilty of paying $130,000 in ‘hush money’ to Stormy Daniels, and following the assassination attempt this past weekend.
There does seem to be a link between Trump narrative plot points and the price of MAGA (any news is good news, is good for the price of MAGA, at least in the short term).
But the price of bitcoin also seems to align with Trump stuff — bitcoin’s price hit all-time high around the time that Trump was let on the California ballot, and rallied again around the end of his hush money trial, and also bounced following the botched assassination. Technical analysis would suggest that it’s mostly coincidence. And the same could go for the spike in MAGA holders, but the connection there does appear obvious.
Another hot memecoin, MOG, gained thousands of new holders as bitcoin rallied to its record high in March, same with MAGA.
And while it wasn’t to the same degree as MAGA, the rate of new MOG holders also picked up when bitcoin sought a retest in late May.
So, who’s in charge: big fish trading on technical market indicators, or Trump, now carrying the torch for celebrity crypto influencers from cycles past like John McAfee and Elon Musk?
Probably both. But I know which answer would mean we’re in for loads more fun heading into November’s election. Let’s go with that.
— David Canellis
The Works
- BlockFi announced it’s beginning its first interim crypto distributions through Coinbase.
- Ethereum developer Virgil Griffith had his sentenced reduced by seven months after pleading guilty to North Korean sanctions violations in 2021.
- State Street is looking into creating a stablecoin, Bloomberg reported.
- Ether ETF issuers announced their fees Wednesday, with BlackRock coming in at 0.25% ahead of potential approval next week.
- Former President Donald Trump told Bloomberg Businessweek that he believes the US should focus on crypto so China or other countries don’t become dominant in the space.
The Riff
Q: Trump has floated JPMorgan CEO Jamie Dimon as a potential Treasury Secretary. Isn’t Dimon anti-crypto?
The full version of the quote falsely attributed to Gandhi goes:
“First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you.”
Jamie Dimon is transitioning between the third and fourth stages right now.
He ignored bitcoin in 2014. “It’s a terrible store of value. It could be replicated over and over,” he said.
In 2017, he ridiculed it, calling it a “fraud” and “worse than Tulip bulbs.”
The following year, Dimon clearly wanted bitcoin to burn, saying “I really don’t give a shit.”
Will Dimon build a monument to bitcoin next, say, in the form of a JPMorgan bitcoin ETF?
In retrospect, it will seem inevitable.
— David Canellis
Here’s the thing: Everyone’s allowed to be wrong.
Actually, in all fairness, I’m not trying to say Dimon’s wrong for taking an anti-crypto stance, but I do think it shows a misunderstanding of crypto.
The JPMorgan CEO, who weathered the 2008 crisis and managed to retain his CEO position, probably has every right to take a skeptical or critical stance on the industry. Honestly, back when I was working on Wall Street, I was also skeptical for a time.
Education is key here. There may be parts of crypto Dimon never supports (no shot we see him endorsing celebrity memecoins, for example) but I think it’s reasonable to believe he could come around.
Take BlackRock’s Larry Fink, for example. In 2017 he called bitcoin “an index of money laundering” but earlier this week, he called it “a legitimate financial instrument.”
And, while I always have to point out that BlackRock has skin in this game, Fink’s shift is not just monetary. It shows that he came around to understand crypto.
With Dimon’s firm already heavily interested in blockchain technology, it may just be a matter of time until we see him don some laser eyes. But, as I’ve said before, I’m not a betting woman.
— Katherine Ross