Does Biden Exit Mean a Lot for Crypto? Experts’ Insights

Does Biden Exit Mean a Lot for Crypto? Experts’ Insights

The shocking news of Joe Biden’s withdrawal from the 2024 United States presidential election race has sent shockwaves through the financial markets, including the crypto community, particularly concerning liquidations.

Such sudden political news caused significant market volatility. In the 30 minutes following President Biden’s announcement, around $67 million worth of leveraged long positions in the crypto market were solddata on Coinglass showed.

Total liquidation of crypto assets in 1-hour time slots in the last 24 hours. Source: Coinglass

As former US president Donald Trump entered his presidential campaign with a seemingly obvious pro-crypto agenda, Biden’s exit brought a new surge of questions about the future of crypto, especially following Biden’s endorsement of Vice President Kamala Harris’ entrance into the presidential race.

We spoke to industry experts to see where their thoughts stand, on the future of the cryptocurrency industry ahead of the upcoming US presidential elections.

Key Takeaways

  • Biden’s unexpected withdrawal caused significant market volatility, leading to the liquidation of around $67 million worth of leveraged long positions within 30 minutes.
  • Investors are unsure whether the next administration will adopt a more stringent or lenient approach to cryptocurrency regulation, causing market volatility as they adjust their positions.
  • Trump’s entry into the presidential race with a pro-crypto agenda has fueled speculation that his potential victory could lead to favorable regulations and broader adoption of cryptocurrencies.
  • Harris’s position on cryptocurrency regulation remains unclear, adding to market uncertainty.
  • The outcome of the presidential election is expected to have a significant impact on the cryptocurrency market.

Crypto Markets Strongly React to Biden’s Exit

Cryptocurrency markets are known to react loudly and effectively to stressful political events, and Biden’s exit from the presidential election campaign was no exception.

During that time, the price of Bitcoin (BTC) fell by around 1.4% from $67,461.61 to $66,493.43. The cryptocurrency has been volatile ever since, falling to as low as $65,500 on July 23, 2024, and currently trading at about $66,000.

Anndy Lian, an intergovernmental blockchain expert and author of Blockchain Revolution 2030, told Techopedia that Biden’s “unexpected withdrawal introduced a level of unpredictability, causing investors to quickly adjust their positions” in the market. The immediate liquidation of long positions indicated that many traders were “caught off guard and moved to mitigate potential losses.”

On top of that, Biden’s endorsement of Kamala Harris has the potential to reshape the political landscape, further influencing market sentiment. Lian said:

“Investors might have perceived Harris as having different policy stances on cryptocurrency regulation compared to Biden, prompting a reassessment of the market’s future. This shift in political dynamics can lead to volatility as traders speculate on how new leadership might impact the regulatory environment for cryptocurrencies.”

Ben Kurland, the CEO of crypto research and charting platform DYOR, added that Biden’s announcement is largely seen as a positive within the crypto community, which was also reflected in BTC’s price which gained about 2.8% after falling by 1.4% post-announcement.

“Investors reacted strongly to the news as Biden’s exit signals a shift in future regulatory policies. The prospect of a new administration with positive views on cryptocurrency is seen as a bullish sentiment. This development indeed suggests that the upcoming elections could have a much larger impact on the crypto market than previously anticipated.”

Biden’s Decision Triggered Uncertainty Over Future Regulations

The relationship between the US and its regulatory policies regarding cryptocurrency markets is a never-ending story, and Biden’s decision to exit the presidential race has certainly opened up new concerns about where regulatory policies, economic strategies, and international relations could be headed in the future.

“Cryptocurrencies are particularly sensitive to regulatory news. Under Biden’s administration, there were ongoing discussions and actions regarding the regulation of digital assets. His exit could mean a potential shift in regulatory approaches depending on who succeeds him.

“Investors might anticipate either a more stringent or a more lenient regulatory environment, leading to volatility in the market as they adjust their positions based on these expectations,” Lian noted.

Vijay Pravin Maharajan, the CEO and founder of bitsCrunch, an AI-enabled decentralized blockchain data network, added that following Biden’s announcement, investors could expect more of Trump’s crypto-friendly rhetoric, especially at the upcoming Bitcoin Conference in Nashville, where Trump is due to speak.

However, Maharajan also reminded that in the long term, the future of crypto will still hinge on progressive regulatory advancements and not just pure speculation.

Of course, Biden’s exit also means that investors and stakeholders will now closely be watching the new candidate’s stance on crypto regulation, as it has the potential to significantly influence market sentiment and investment strategies.

DYOR’s Kurland added that with Biden’s exit, many in the crypto industry are confident that Trump could win the elections.

Expectations For Trump’s Presidency on the Rise

Trump is using the hype surrounding cryptocurrencies to bolster his candidacy during presidential campaigns; however, industry experts note that current events could continue to favor him.

Alex Momot, the founder and CEO of Peanut Trade told Techopedia that while Biden’s exit might not play a significant role for the future of crypto, it could still affect Republican policies and the overall expectation that Trump could become the next president.

Momot added that in that case, regulations from the Vice President or rumors about Larry Fink could also play a very positive role in the crypto industry. In recent days, the New York Post reported that if Trump wins the elections, he could appoint BlackRock’s CEO, Larry Fink, as the next Treasury Secretary due to their shared history. However, Trump denied this possibility.

DYOR’s Kurland added that Trump has shown he is willing and able to support crypto, especially in his recent comments that BTC and other digital currencies “are very much here to stay.”

“If Trump wins, I believe it will not simply be an initial shock but will likely propel Bitcoin to new heights and allow for more innovation and growth in the sector in the US, which should time up nicely with an anticipated extension to this bull market cycle.”

However, all of this could also be very ambiguous as it highly depends on where Kamala Harris stands in relation to cryptocurrency policies.

Kamala Harris & Crypto: An Uncharted Territory

Speaking with Techopedia, Lian noted that Harris’s stance on cryptocurrency policies continues to remain ambiguous. However, in a recent interview with Decrypt, US entrepreneur and BTC enthusiast Mark Cuban noted that he has received a handful of questions about crypto from Harris’ campaign team.

Lian added that Harris does have a history of being tech-friendly, stemming from her time as District Attorney of San Francisco and Attorney General of California, where she engaged with the tech industry extensively. Thus, her background suggests she may have a more open and innovative approach to technology, including cryptocurrencies.

“Secondly, as Vice President, Harris has been part of an administration with a cautious but progressive stance toward digital assets,” Lian added. “The Biden administration has focused on balancing innovation with consumer protection and regulatory oversight. If Harris continues in this vein, we might expect her to support a regulatory framework that encourages innovation while ensuring market stability and protecting investors.”

Michael Brescia, the CEO and co-founder of Cerus Markets, agreed, noting that while Democrats tend to be more pro-regulation than Republicans, there is a slight possibility that Harris will take a more balanced approach toward crypto regulation.

However, since Harris is yet to outline her views on crypto regulation, it leaves much room for speculation.

BitsCrunch’s Maharajan added:

“Given the plaudits that Trump has received from the crypto community, the Harris campaign should at the very least outline their plan for fostering crypto innovation on US soil. Talk of overly restrictive policies would certainly dampen market momentum.”

The Bottom Line

After speaking with some pro-crypto experts, Lian noted that the general sentiment within crypto circles is that Trump could win the current US presidential election, especially given the ongoing aftermath of Biden’s exit.

“To be very honest, I did a quick poll and most of my pro-crypto friends are all assuming that Trump will win. Most of them do not care about Harris. Maybe this is also an Elon Musk effect.”

Biden’s exit has definitely added a “wild card” to the election campaign, Cerus Markets’ Brescia added, making the outcome much harder to predict than ever before. On the contrary, he believes that the current events have led Trump’s odds of winning the election to decline.

One thing stands clear, however: no one can predict the direction of the crypto markets unless Harris opens up about her stance on crypto regulations.

 

Source: https://www.techopedia.com/what-does-biden-exit-mean-for-crypto

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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SEC removes digital assets from hedge fund rule: What does it mean for the future of digital asset regulation

SEC removes digital assets from hedge fund rule: What does it mean for the future of digital asset regulation

The U.S. Securities and Exchange Commission (SEC), which regulates the securities industry, has recently decided about digital assets. Digital assets are virtual or digital currencies that can be traded or exchanged. The SEC previously defined digital assets as securities in its hedge fund rule, subjecting them to additional regulations.

Hedge fund rule

The hedge fund rule, officially known as Rule 206(4)-8 under the Investment Advisers Act of 1940, is a rule created by the U.S. Securities and Exchange Commission (SEC) to prevent investment advisers from making false or misleading statements to investors in pooled investment vehicles such as hedge funds.

The rule imposes additional reporting and disclosure requirements on advisers to hedge funds and other private funds and requires them to implement specific compliance programs and risk management measures. The rule is designed to protect investors and maintain the integrity of the financial markets by ensuring that investment advisers act in their client’s best interests and provide accurate and complete information about their investment strategies and risks.

In the context of digital assets, the SEC included a definition of “digital assets” as securities in its hedge fund rule, subjecting them to additional regulations. However, the SEC recently removed this definition, indicating that it is still evaluating the term and has not yet decided whether digital assets should be classified as securities.

New asset class for “digital assets”?

Many people have been surprised by this move and have questioned the SEC’s approach to regulating digital assets. It’s worth noting that SEC Chair Gary Gensler gave a speech before the House Financial Services Committee on April 18, 2023, regarding the agency’s stance on digital assets. The hearing was not dedicated exclusively to the SEC’s crypto strategies, but the regulatory agency’s chairman faced criticism over perceived regulatory overreach and lack of clear crypto classification. During the hearing, Gensler refused to comment on whether Ether (ETH) was a security or a commodity, saying it depends on the facts and the law, despite being told he knows. It is worth noting that the U.S. House Financial Services Committee and House Agriculture Committee are set to put together legislation to oversee the crypto sector. The bill will be introduced within the next two months.

Having said so, I do see this in a more positive light. This suggests that the SEC is working on a regulatory framework for digital assets, and this decision may be part of a larger strategy. The SEC may have removed the definition of “digital assets” from the hedge fund rule to allow for further consideration and evaluation of the appropriate regulatory approach for this new asset class. The SEC could be taking a cautious approach to ensure that any regulatory framework it develops is appropriate for digital assets’ unique characteristics and addresses potential risks without hindering innovation.

Regulating digital assets is complex and contentious

Experts have commented on the SEC’s decision to remove its previous definition of digital assets as securities, which would have subjected them to additional regulations. Coinbase, a major player in the crypto industry, has publicly opposed the SEC’s stance on regulating digital assets. Some experts believe that the digital assets sector needs to focus more on risk management and operational due diligence, coupled with thoughtful regulation, to repair its reputation.

It’s essential to recognize that the SEC has had a changing stance on digital assets, and this recent decision isn’t the first time they’ve taken a position on their classification. Previously, the SEC confirmed that a 401(k) plan could be considered a single investor under section 3 (c) (1) and a qualified purchaser under section 3 (c) (7) if plan participants have investment discretion to allocate their accounts.

The question of how to regulate digital assets is complex and contentious. In addition to the points made, some argue that digital assets fundamentally differ from traditional securities and should be treated as a separate asset class. Because they operate on a decentralized network, digital assets aren’t subject to the same regulations and oversight as traditional securities. This lack of regulation has led to concerns about market manipulation, fraud, and other illicit activities.

Moreover, digital assets aren’t backed by physical assets or government guarantees, which makes them inherently risky. However, they also have the potential for high returns, which can entice investors who are willing to take on more risk in their investments. Due to these unique characteristics, some experts suggest that digital assets require a different approach to risk management, valuation, and investment strategies than traditional securities.

The evolving nature of the digital asset market may require clearer regulatory frameworks and standards as it matures. However, there is uncertainty surrounding how these assets will be classified and regulated and how this will affect the overall market. Digital assets have unique characteristics that differentiate them from traditional assets, including decentralization and the use of blockchain technology. This technology enables borderless transactions, smart contracts, and decentralized applications that offer new investment opportunities for retail and institutional investors.

Ending remarks

The growth of the digital asset market has attracted significant attention from regulators and investors, with some arguing that digital assets should be treated as securities to protect investors from fraud. The SEC’s decision to remove the definition of digital assets as securities from its hedge fund rule have fueled ongoing debate about the appropriate regulatory framework for this asset class. As the use of digital assets continues to expand, the SEC will likely continue to develop its regulatory approach.

In conclusion, the SEC’s recent decision is a significant development in regulating digital assets and raises questions about how these assets will be classified and regulated. As the digital asset market matures, there may be a need for clearer regulatory frameworks and standards to protect investors and prevent fraud while allowing for innovation and growth.

 

Source: https://www.financialexpress.com/business/blockchain-sec-removes-digital-assets-from-hedge-fund-rule-what-does-it-mean-for-the-future-of-digital-asset-regulation-3080830/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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What do Ordinal Inscriptions Mean for the Future of Bitcoin?

What do Ordinal Inscriptions Mean for the Future of Bitcoin?

A great deal of buzz has been generated by a novel type of non-fungible tokens known as Ordinal inscriptions. What sets these NFTs apart is that all of their data is etched onto the Bitcoin blockchain, diverging from Ethereum NFTs which are reliant on off-chain metadata that can be altered. Here’s a closer look at Ordinal inscriptions and their potential impact on the future of Bitcoin.

Ordinal inscriptions are a type of NFT that can be created on the Bitcoin blockchain, which allows for all of the data to be directly inscribed on the chain. This is in contrast to Ethereum NFTs, which rely on off-chain metadata. Due to this distinction, Ordinals are considered a potential solution to the challenges that are associated with Ethereum NFTs.

Ordinal inscriptions serve as a means of organizing data on the Bitcoin blockchain. The Bitcoin blockchain functions as a decentralized ledger of all Bitcoin transactions, and Ordinal inscriptions provide a unique identifier for each transaction.

While these identifiers are useful for tracking and verifying transactions, there are concerns about the potential for issues, such as “transaction malleability,” to arise as a result of Ordinal inscriptions. Some experts have raised concerns in this regard.

The term transaction malleability refers to the ability of a third party to modify a transaction ID without altering the transaction itself. This can result in confusion and make it more challenging to track and verify transactions.

The concern with Ordinal inscriptions is that if they are not used correctly, they may lead to an environment in which transaction malleability is more prevalent. This could have the effect of making it harder to rely on Bitcoin as a secure and dependable method of payment and transfer.

Fortunately, many experts in the crypto community are aware of the potential risks associated with Ordinal inscriptions and are taking steps to mitigate them. One of the most significant efforts in this regard is the implementation of Segregated Witness (SegWit).

SegWit is a software upgrade that allows for more efficient use of the Bitcoin blockchain by separating signature data from transaction data. This helps to decrease the size of transactions and reduces their susceptibility to malleability.

Beyond SegWit, ongoing efforts are being made to develop other solutions to address the potential risks associated with Ordinal inscriptions. The Lightning Network is one such solution, as it is a layer of two solutions that enables faster and less expensive Bitcoin transactions by conducting them off-chain.

Should you be concerned? If you are a casual Bitcoin user, you likely do not need to be overly concerned about Ordinal inscriptions. The potential risks associated with them primarily affect those involved in more complex Bitcoin transactions, such as multi-signature wallets or smart contracts.

Despite the potential benefits of Ordinal inscriptions, there has been a lot of debate over whether they are a “good use” of block space. As more Ordinals are being inscribed, the cost of Bitcoin transactions has risen. Ordinals introduce additional, non-financial data on the Bitcoin blockchain, which can bog down on-chain confirmation times. This includes images, audio clips, and even games. Those not in favour of Ordinals see this as an impediment to the ability of Bitcoin to scale and reach full global adoption.

Inscribing non-fungible characteristics to satoshis, the individual increments of Bitcoin, may challenge its use in place of conventional currency. Ordinals challenge the fungibility of satoshis on the Bitcoin network, as all satoshis should be equal, or they begin to lose a significant trait of money. But Ordinals can alter the value of these units of money, much like rare collectible coins. This debate over whether these individual units must be deemed equal is unfolding before our eyes and needs to be understood.

Bitcoin is money, and that’s the largest and most important use case, impacting the most people in the world. In the end, I believe that Ordinals will remain niche. While Ordinals may be viewed as exciting, they are unlikely to become the go-to choice for many people who use Bitcoin’s block space.

Ultimately, the markets decide. One of the biggest yet baseless claims is that Bitcoin doesn’t evolve or change. While there may be some truth to this, any changes to the protocol should be slow and methodological. Ultimately, the markets will decide whether Ordinal inscriptions are a viable solution for the challenges associated with Ethereum NFTs.

One key factor to remember about Bitcoin, and any other digital asset, is that its success depends on market demand. If the market values the features offered by Ordinal inscriptions, then they are likely to be adopted and integrated into the Bitcoin network. However, if the market does not value them, then they will remain a niche offering.

While Ordinal inscriptions may pose some potential risks to the Bitcoin network, the crypto community is actively working to address these issues. As long as you take appropriate precautions to protect your Bitcoin holdings, there’s no need to be overly concerned about this discussion in the short term. In fact, these discussions help to strengthen and test the resilience of the Bitcoin network. I see lots of positivity in this.

 

Source: https://intpolicydigest.org/what-do-ordinal-inscriptions-mean-for-the-future-of-bitcoin/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j