The crypto market soared on Monday as U.S. presidential candidates battle to win the crypto vote. Today's news is that Kamala Harris will support crypto legislation to "make sure owners of and investors in digital assets benefit from a regulatory framework."
While the details were sparse, the sentiment was enough to send crypto higher, and some altcoins and memecoins were the biggest beneficiaries. Solana (SOL +2.02%) is up 7% in the last 24 hours as of 5:00 p.m. ET, Shiba Inu (SHIB +3.47%) is up 5.7%, Pepe (PEPE +2.09%) jumped 11.5%, and Bonk (BONK +3.61%) has risen 10.4%.
CRYPTO: SOL
Key Data Points
The crypto policy debate
It's not usually a good idea to invest based on politics, but that doesn't mean that politics and policy don't impact investments. That's more evident than ever in the crypto market, where most exchanges and tokens have faced a court date with the SEC at some point.
Both presidential candidates are now firmly in favor of regulating cryptocurrency in one form or another and that could open up more development and innovation in the industry. What's interesting today is that meme coins and altcoins have reacted the fastest.
How regulation could help the crypto market
While Bitcoin and Ethereum have gotten the most attention in crypto, they're not where most of the innovation is taking place. Blockchains like Solana are faster and less expensive, processing many times more transactions than Bitcoin and Ethereum combined. If there's a regulatory framework for crypto and the blockchain, it's likely these altcoins are where the activity will move.
Memecoins like Shiba Inu, Pepe, and Bonk are just along for the ride in some ways. They are riding the "meme" of crypto and could ultimately be tokens people transact with. But just being legal to own would be a good start for these tokens, whether they're tied to a blockchain or not.
CRYPTO: PEPE
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Where will crypto go from here?
The biggest answer the crypto industry needs is clarity about what the rules are. The U.S. SEC has even admitted it hasn't been clear or answered the industry's questions about what's allowed and what's not under current securities law.
Two changes could happen under a new administration, which will take shape in January 2025, no matter who wins. First, the leadership of the SEC could change and they could shape the industry's future without any changes to the law. Second, Congress could pass new laws that would give the industry clarity about guardrails and what's allowed.
Either way, it's possible more friendly leadership in the White House would be good for the industry, unlocking potentially billions in investment that's been forced offshore or to the sidelines.
We saw a flood of funds coming into the industry when Bitcoin ETFs were approved and that could be the case for companies building on the blockchain with regulatory clarity. That's what investors are betting on today and it could help drive crypto values higher. I think the tokens with real utility are the best plays for investors, but meme coins could ride the wave longer than many observers think.
