Cryptocurrency Market Sees Unexpected Surge
The cryptocurrency market has experienced a significant surge in recent days, with Solana’s native token, Sol, rising by 22% and Ripple’s XRP jumping by 25%. This upward trend is double that of Bitcoin and Ether, according to CoinGecko data.
What’s Behind the Surge?
As of Friday afternoon ET, Sol is trading at $170, and XRP is at $0.6. The primary reason for this price surge is likely the increasing electoral chances of Donald Trump. Prediction markets, which research suggests may be more accurate at forecasting political outcomes than polls, have boosted their predictions of Trump becoming the next president to 63% and 64%, according to Polymarket and PredictIt respectively.
The Trump Effect
The increased odds of Trump’s presidency coincide with the Republican National Convention, which took place this week. Trump has courted Bitcoin miners and called for the industry to be America-first. He’s also encouraged crypto donations to his campaign. Next week, he’ll set out his vision for crypto in America at Bitcoin 2024 in front of 30,000 industry fans.
The Crypto Industry’s View
The crypto industry has mounting evidence that a Republican administration would mark a major inflection point for how digital assets are regulated in the U.S. Trump has courted Bitcoin miners and called for the industry to be America-first. He’s also encouraged crypto donations to his campaign. Next week, he’ll set out his vision for crypto in America at Bitcoin 2024 in front of 30,000 industry fans.
The Trump Trade
Traders may be paying extra attention to Solana as the Securities and Exchange Commission’s deadline for ruling on spot Solana exchange-traded funds is next March. Due to the absence of a Solana futures market, the likelihood of the SEC under a Biden administration approving the instruments is very unlikely. Thus, the applications for the ETFs are "largely a bet" on Trump winning the election, James Seyffart, Bloomberg’s ETF research analyst, previously told Fortune.
Wider Trends Fueling Prices
Another reason why Sol may be up more than other tokens is because it’s become the go-to blockchain for memecoins, a corner of crypto which often sees the greatest price swings during periods of market invigoration. Solana-based memecoins have been skyrocketing this week, with popular tokens dogwifhat, Bonk, and Donald Tremp up 62%, 36%, and 15%, respectively, according to CoinGecko data.
DeFi Activity on Solana
But zooming out beyond just this week, another factor behind why Solana has been on an upwards price trajectory this year is the increase in decentralized finance, or DeFi, activity on the network. Since the year’s start, the total value locked from DeFi on Solana has more than tripled to over $5 billion, according to DeFiLama data.
XRP’s Rise
When it comes to XRP, another factor behind its exuberant rise this week may be the "signs of resolution" in its ongoing legal battle with the SEC. Of the lawsuit filed by the SEC in 2020, Ripple’s CEO Brad Garlinghouse told Bloomberg on Wednesday: "The ruling has been clear from the judge. There is one final piece about these investment contracts sold to institutions. We expect a resolution very soon, but we can’t predict exactly when the judge will rule there."
Conclusion
The cryptocurrency market has experienced a significant surge in recent days, with Solana’s native token, Sol, rising by 22% and Ripple’s XRP jumping by 25%. This upward trend is double that of Bitcoin and Ether, according to CoinGecko data. The primary reason for this price surge is likely the increasing electoral chances of Donald Trump. The crypto industry has mounting evidence that a Republican administration would mark a major inflection point for how digital assets are regulated in the U.S.
FAQs
Q: What is the reason behind the surge in cryptocurrency prices?
A: The primary reason is likely the increasing electoral chances of Donald Trump.
Q: What is the current price of Sol and XRP?
A: As of Friday afternoon ET, Sol is trading at $170, and XRP is at $0.6.
Q: What is the significance of the Republican National Convention in this context?
A: The increased odds of Trump’s presidency coincide with the Republican National Convention, which took place this week.
Q: What is the significance of the SEC’s deadline for ruling on spot Solana exchange-traded funds?
A: The deadline is next March, and due to the absence of a Solana futures market, the likelihood of the SEC under a Biden administration approving the instruments is very unlikely.
Q: What is the significance of DeFi activity on Solana?
A: Since the year’s start, the total value locked from DeFi on Solana has more than tripled to over $5 billion, according to DeFiLama data.
Q: What is the significance of the ongoing legal battle between Ripple and the SEC?
A: The lawsuit filed by the SEC in 2020 may be nearing a resolution, which could have a significant impact on the price of XRP.
Author: fortune.com
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