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Biden Withdraws from Presidential Race: What's Next for the Crypto Market?
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Summary: Focus on the unusual movements of Trump-themed tokens on the MEXC platform.
Introduction:
In the early morning of July 21, Beijing time, U.S. President Joe Biden officially announced that he will withdraw from the 2024 presidential race and will deliver a speech later this week to provide further explanation.
The announcement caused a significant stir, leading the crypto market to experience a brief decline before quickly rebounding, with Bitcoin reaching a new one-month high of $68,000. Meme projects associated with Biden plummeted, while Trump-themed tokens surged in popularity, with TREMP and MAGA seeing daily gains of over 20%.
What lies ahead for the crypto market as the U.S. presidential election approaches and Biden withdraws from the race? In such a volatile environment, what trading strategies should investors adopt to capture excess returns?
1. Biden-themed Tokens Plummet; Trump-themed Tokens Surge in Popularity
Since the beginning of this year, with the introduction of BTC spot ETFs, the connection between the crypto market and the traditional financial world has become increasingly close, and the correlation between BTC and the U.S. stock market has reached its highest level in 19 months. Consequently, when Biden announced his withdrawal from the race, the crypto market reacted accordingly.
Such a reaction was first observed in BTC, with MEXC market data showing it briefly falling below $66,000 to a low of $65,777 at 2 AM Beijing time. It then stabilized and rebounded above $68,000, reaching a new one-month high of $68,474. Other major cryptocurrencies also experienced significant gains on Monday morning.
Meme projects related to Biden have experienced a dramatic plunge. CoinGecko data shows that the Solana ecosystem meme token BODEN fell over 60% within 4 hours of Biden’s withdrawal announcement, with its current price dropping to around $0.0087. The market cap has decreased to just $6.4 million, a nearly 90% decline from its historical peak of $640 million.
Meme projects related to Biden's family have been hit even harder: JILLBODEN plunged 69%, and LAPTOP dropped 62%, with both market caps falling below $100,000. The Solana ecosystem's THE JEO BODENS NFT series saw its floor price drop to 0.050 SOL, marking a 68% decline in 24 hours.
In contrast, Trump-themed tokens have surged in popularity. MEXC market data shows that the Solana ecosystem meme coin TREMP skyrocketed from $0.45 to nearly $0.60, with a gain of over 33.3% within one hour. Currently, TREMP is stable at around $0.48, and the project's market cap is $45.2 million.
(Price Trend Chart of TREMP on MEXC)
MEXC was also the first centralized platform to list TREMP, with an opening price of $0.20 and a peak rise to $1.53, representing a maximum gain of over 660%. There is still an over 100% return even at the current price.
This is not an isolated case. This year, MEXC has focused heavily on meme projects, promptly screening popular projects and listing them after evaluation to meet investors' trading needs on time.
For example, MEXC first listed the MAGA token, themed "Make America Great Again", as early as February this year. Early traders on the platform saw profits of over 10,000%. In mid-July, following the news of Trump's assassination attempt, MEXC promptly listed several meme coins, including FIGHT, EAR, and FIGHTETH, all of which experienced notable gains. Among them, FIGHTETH saw a peak rise of over 1,000% within just one day of its listing, with a daily trading volume reaching nearly $2 million.
MEXC has earned the admiration of many crypto traders with its fast listing speed and high-quality projects. Users interested in Trump-themed tokens are welcome to visit https://www.mexc.com to trade.
2. Attitude of Biden's Successor Towards Cryptocurrencies
After Biden announced his withdrawal from the election, the identity of his successor became the market's focal point.
Market news suggests that the current U.S. Vice President Kamala Harris is likely to become the Democratic presidential candidate in 2024. Prediction market Polymarket data shows that the probability of Trump winning the 2024 U.S. presidential election has dropped to 66%, while Harris's probability of winning has risen to 32%. Of course, nothing is set in stone until the actual election arrives.
Nevertheless, the cryptocurrency market has reacted. The price of the meme token KAMA, related to Harris, surged by 133% in one day. This meme token has risen about 600% in the past week and has skyrocketed over 1,500% in the past 30 days.
The rise of Harris has attracted significant attention from the cryptocurrency community. According to Cointelegraph, public financial data from the White House shows that Harris and her husband have substantial investments, but neither holds any digital assets. They are more inclined to invest in U.S. Treasury bonds and emerging markets. Additionally, she has not been involved in the crypto sector and has never made strong statements supporting or opposing digital currencies, tokenization, blockchain, or NFTs.
“What we don’t yet know is Harris’ views on crypto,” said Caroline Bowler, CEO of BTC Markets. “On something like crypto where it could end up being a make or break election subject for either of the candidates, we could see some more insights into her views in the coming weeks.”
In addition to Harris, former U.S. President Obama's wife, Michelle Obama, is also expected to be another potential Democratic candidate. Following the announcement of Biden's withdrawal, the meme coin OBAMA, named after Michelle Obama, also performed well. It surged from $0.003 to over $0.008 at one point, representing an increase of 276% within an hour. Although it later fell back below $0.003, it has since stabilized around $0.0074, with the project's market value around $7.4 million. Furthermore, Michelle Obama has no record of directly participating in crypto activities or making related statements.
Considering the ongoing U.S. election and the significance of crypto investors as a crucial voting group influencing the upcoming election competition, cryptocurrency has once again become a focal point of election debates. Therefore, it is not ruled out that future new Democratic presidential candidates will continue to show support for cryptocurrency.
3. Will Future Regulations Be More Crypto-Friendly?
Regarding Biden's withdrawal from the election, the market presents two different viewpoints.
One viewpoint suggests that Biden's withdrawal is unlikely to have a significant impact on the market. Piers Bolger, Chief Investment Officer of Tianheng Asset Management, stated that in the short term, U.S. President Biden not seeking re-election and instead supporting Vice President Harris is unlikely to have a substantial impact on the market. He believes that the market will continue to focus on the Federal Reserve's policy direction, which is the key factor driving the market. "We still expect the Federal Reserve to begin to ease monetary policy at the September FOMC meeting."
More market voices believe that Biden's withdrawal could have a positive impact on the cryptocurrency market, especially if former President Trump becomes the Republican candidate and returns to the White House. Trump has expressed support for cryptocurrencies, accepted cryptocurrency donations for his presidential campaign, and promised to end the so-called Biden's "War on Crypto".
Therefore, market participants may anticipate a more crypto-friendly policy environment under Trump's leadership. Looking at market trends, the price of BTC experienced a dip after Biden announced his withdrawal, then rebounded, indicating that the initial market reaction to this news was negative, but subsequently turned positive.
A report by crypto research firm 10x Research pointed out that with Biden's withdrawal, a crypto-friendly government will take office. Historically, this means that the SEC Chairman resigns when a new administration is elected. Although SEC Chairman Gary Gensler's term ends on June 5, 2026, he might resign in January or February 2025.
Teong Hng, CEO of crypto investment firm Satori Research, noted that activity in the OTC options market suggests that BTC might soon return to its historical highs. He added that bullish sentiment among institutional investors is increasing, and BTC prices are expected to see a strong rebound by the end of the year, with Trump's victory marking the peak of this asset's price.
Benjamin Celermajer, Co-Chief Investment Officer of Magnet Capital, stated that under Trump's administration, the crypto market will become more investable. Chris Weston, Head of Research at Pepperstone Group, analyzed that the U.S. BTC spot ETF recorded net inflows for eleventh consecutive day on Friday, with strong capital inflows indicating that BTC prices are likely to hit $70,000 again.
In summary, crypto investors need to focus on the future policies proposed by both parties, reassess their expectations for future policies, and pay close attention to the Federal Reserve's policy direction.
If you are a risk-taker, you might want to focus on various election-related meme projects in the coming period, especially the tokens selected by MEXC, to capture high returns. If you are a conservative trader, you can try dollar-cost averaging in Bitcoin on MEXC — MEXC offers the lowest trading fees in the industry, with zero fees for makers, and the highest returns on BTC and ETH Savings among centralized platforms, allowing users to easily earn "passive income".
Disclaimer: This information does not provide advice on investment, taxation, legal, financial, accounting, consultation, or any other related services, nor does it constitute advice to purchase, sell, or hold any assets. MEXC Learn provides information for reference purposes only and does not constitute investment advice. Please ensure you fully understand the risks involved and exercise caution when investing. The platform is not responsible for users' investment decisions.