Introduction The Decentralized Finance (DeFi) Revolution is taking over traditional finance (TradFi) and centralized exchanges (CEX), with billions in...
With the United States having finally ‘declared’ a victor in the 2020 presidential election, we can finally untie and turn our heads to look forward. Or so, we hoped. What is more likely though is a messy transition, filled with more uncertainty, with the next 4 years being managed by President Joe Biden. It feels like we, the market, have been living in an off world type of simulation the last 4 years — so much so that no one is very certain how things will turn out in the cryptocurrency world with a new President in the White House.
The markets seem to be reacting relatively positively as bitcoin jumped (and will probably continue to do so). Then there is also the news that Joe Biden may appoint Lael Brainard in some form of prominent financial based cabinet position, in addition to pro bitcoin enthusiast Andrew Yang. Let’s not forget that Vice President Kamala Harris has Ryan Montoya on her staff — someone who helmed a digital development while running the Sacramento Kings franchise by using digital currencies.
This piece however though, will not focus so much on the myopic possibilities or likeliness of things that may or may not happen, you can try your local tarot card store for that. Instead, we thought it would be a good time to take a look at the longer view. What potential effects could a Biden presidency have on the crypto market over the next 4 years, rather than the next 4 weeks? This becomes more interesting when we factor in the reality that 4 years in crypto is akin to about 40 years in real time development, so perhaps the underlying truth is that the Biden administration may not have too much of an effect on the market after all — but where’s the fun in that? So, here are 3 predictions about the first 4 years of the Biden administration regarding the world of crypto.
1. Stablecoins will be the “norm” by his 3rd year
Okay, let’s get the least sexy and most realistic one out of the way first. By “norm” we mean that the hardworking American folks who flipped Arizona and Wisconsin will have some percentage of their money tied up in stablecoins.
So the argument for this is quite logical, and more importantly — feasible. If Biden appoints Andrew Yang as some form of head of technology or innovation, it is easy to see how Yang’s universal basic income (UBI) policy can be implemented through stablecoins. When combined with Brainard’s role as Fed Chair, this is almost too easy to not happen. Biden has always been pro-UBI on the campaign trail, and the US is ravaged by a slowing economy, domestic tension, and a growing divide in class. What easier way to “help” people out by assigning a digital wallet through a federally run banking program, and deposit stablecoins into the accounts as a form of UBI instead of mailing them like they did for a month in 2020. Having more financial enterprises like PayPal and JP Morgan will undoubtedly move the needle towards stablecoins as well, and once you see wider adoption the snowball will only grow faster. This one is in the books, as far as we are concerned.
2. The crypto overall market will peak in his 2nd year
As the adage goes, Rome wasn’t built in a day. But the fall of Rome, also did not happen in a day. The traders, whales, and other capitalists who are trying to gain an immediate margin off the back of the election results will be in for a disappointment, as the market won’t fully hit maximum velocity until his 2nd year. Don’t get us wrong, there will very much be a spike in the short run, say Q1-Q2 of 2021, especially as COVID-19 is still lingering around, and global economies are barely holding on to the life rafts. There will be a panic to shore personal assets in non-traditional assets like Bitcoin or even Ethereum. But our prediction is that as the world slowly becomes safer to travel and trade, so will the underlying crypto market growth. This is comparable to office space trends. With COVID-19, we have realized that modern offices probably won’t be as popular anymore, as more and more organizations are investing in and pivoting to more flexible working situations, whether that is fully remote or some sort of hybrid model. The financial asset market will probably undergo a similar transformation, as more people will look to diversify their money out of traditional savings and retirement accounts and into other assets such as gold or cryptocurrency. When this adaption happens, genuinely for possibly the first time, we’ll see a long and stable bull market in cryptocurrency.
3. A hockey stick curve in the works by the 4th year
If there’s one thing we can remember from around 2017, it’s the seemingly endless new projects being broadcasted every day. What gets often forgotten though, is that some of these projects were actually fairly well-thought-out, at least in theory — and potentially had real market applicability if run by different people, had waited a few years for technology to catch up, or had more capital injection. The good news is that these ideas are about to get all three of these factors, which should lead to a hockey stick curve in new projects. To be clear though, there will be a significant difference between 2017 and now. Back then, most projects were started by greedy random people and backed by blind money looking for a quick buck, without credentials or real public trust. This time, it will be bigger enterprises who are going to dip into the space — either through stablecoins. By year 4 of Biden’s Presidency, we fully believe there will be a surplus of companies involved some way in cryptocurrency. This could even be McDonald’s issuing a governance token, to let token holders vote on menu items (such as bringing the McRib back, PLEASE!). Or it could be a company like Nike, issuing its own NFT that grants you access to pre-launch parties for sneakers or digital artworks, or PayPal going to their next logical step and building their own stablecoin for their 300+ million US accounts. Either way, there will be a fully entrenched enterprise system by his 4th year in office, and wouldn’t that be neat?
In conclusion, there is going to be much speculation in the short run during the Biden transition. Like any change, this could be a bumpy ride. But change will happen with or without our desire, because that is simply how the world works. The DeFi space and stablecoin sector in general have shown just how much change can occur in less than a single calendar year, even with a pandemic going on. So maybe we should take a minute and imagine, nay — dream, of what can possibly be achieved in four calendar years. Either way, while taking a purely cryptocurrency based outlook on the Trump presidency is not all doom and gloom, we hope that a Biden term will bring more stability to the world, and with it, larger gain as well.
To learn more about the benefits of using stablecoins and how they can improve your business operations as well as position you as a pioneer in the adoption of disruptive technology, reach out to us here. We will gladly walk your organization through the steps of building a stablecoin with our all-in-one solution. Whether it is the code, compliance, distribution, or marketing, we’ve got you covered.
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