Markets
What this means for cryptocurrencies
It is important to note that Joe Biden will remain president for the remainder of his term. The question now is who will replace him in the November election against Trump.
by Joe Biden abrupt departure from WE The presidential race initially caused some panic among the Encrypt markets.
Bitcoin fell nearly $1,500 in just under 30 minutes as investors digested the news amid uncertainty over who might take over as the Democratic nominee.
But the dip was short-lived to say the least, as traders began to realize that, at least as far as cryptocurrency policy is concerned, this could represent some sort of bullish development.
Source: TradingView
Industry leaders have been exasperated by the Biden administration’s approach to digital goods amid accusations that it stifled innovation and ultimately helped harm consumers.
In March 2022, there had been optimism when the president signed an executive order on cryptocurrencies and instructed government agencies to assess their risks and benefits.
At the moment, Monetary base said he had taken a “pretty neutral stance” on digital assets and that it was “a signal that the White House is taking the promise of this technology seriously.”
Six months later, Biden released an official framework that sets out how cryptocurrencies should be regulated. But many in the industry felt it was thin on detail and lacked substance.
Of particular concern has been the lack of clarity over which agencies should be tasked with overseeing the market, creating a tug-of-war between Securities and Exchange Commissionand the Commodity Futures Trading Commission.
Coinbase has repeatedly called for action, and in June 2023, the exchange’s chief legal officer, Paul Grewal, warned that the U.S. was “falling behind” other countries.
“The US is pushing technology and innovators abroad due to the lack of clear rules and regulations for cryptocurrencies. The rest of the world is not waiting for us and is taking advantage of our absence.”
Paul Grewal
Grewal went on to praise the bipartisan efforts being made by Congress to establish clear rules for cryptocurrency companies to follow, but to date no concrete legislation has been enacted.
Most recently, Biden controversially vetoed a bill that would have eliminated a controversial accounting policy enforced by the SEC, known as SAB121.
Kirstin Smith, CEO of the Blockchain Association, said the rule was “nothing more than a punitive, anti-digital asset tool” and made it prohibitively difficult for financial institutions to hold cryptocurrencies on behalf of their clients. At the time, the president said:
“My Administration will not support measures that jeopardize the well-being of consumers and investors. Adequate protections that protect consumers and investors are needed to capitalize on the potential benefits and opportunities of cryptocurrency innovation.”
Joe Biden
And while the president said his administration was “looking forward” to working with Congress to develop “a comprehensive and balanced regulatory framework,” that has yet to emerge.
At times, the Biden administration has inadvertently been embroiled in one of the biggest scandals to ever overshadow the cryptocurrency industry: the sudden collapse of FTX.
CEO fallen from grace Sam Bankman-Fritto had donated $5.2 million to Biden’s 2020 presidential campaign, making him the second-largest donor.
Before its empire collapsed, SBF had also donated tens of millions of dollars to Democratic candidates, and clients’ funds were found to have been misappropriated.
White House spokeswoman Karine-Jean Pierre then had to answer awkward questions about when this money would be returned to help compensate victims.
What happens now?
It is important to note that Biden will remain president for the remainder of his term, but is currently still recovering from COVID in Delaware.
The focus now turns to who will take over as the Democratic nominee, and while current Vice President Kamala Harris appears to be the frontrunner, there are no guarantees.
Jake Chervinsky, chief legal officer at Variant Fund, says the party now has “a huge opportunity to recapture a significant share of the crypto vote.”
On X, he asked the new candidate to:
- Recognize cryptography as an important technology and commit to ensuring it thrives
- Accepting that the SEC’s approach to regulation has failed
- Define policies that strike a balance between innovation and consumer protection
- Outline who would lead key agencies like the SEC and CFTC
- Collaborate with Entrepreneurs and Investors in the Cryptocurrency Industry
It should become clearer in the coming days who will face Trump in November, but regardless of which Democrat it is, it is highly unlikely that they will be as pro-cryptocurrency as the Republican ticket.