Bitcoin Gets A Trump Bounce | Ether ETFs To Begin Trading Next Week

This trend appears likely to continue over the short term as Trump’s reelection prospects continue to grow. Prediction market Polymarket is now saying there is a 63% chance that Trump will retake the White House. Trump is also scheduled to speak at a major crypto event in Nashville next week, which would be his first appearance at a tentpole industry conference.

However, a major wild card continues to be the increasingly tenuous future of President Biden’s reelection bid. As of this writing, pressure is building on the president to step aside from key Democratic leaders. Vice President Kamala Harris appears to be the likely successor if he forgoes the nomination. If she were to assume the candidacy (or presidency, for that matter), it is fair to expect that her policies would mimic those of the current president, which have drawn the industry’s ire. According to Polymarket, betters give Harris a 22% chance of winning the election. Biden’s odds have fallen to 5%.

It will be interesting to watch market uptake for these products, as the industry is still digesting the bitcoin products. Matt Hougan, Bitwise’s chief investment officer, says that the products will be successful for three primary reasons: an inflation rate of zero, limited selling pressure from stakers (unlike bitcoin miners who regularly sell new bitcoin into the market, and the fact that 28% of ether is currently staked and thus illiquid. According to Hougan, adopting these products can push the price of ether beyond $5,000 and lead to $15 billion in net inflows over the first 18 months of trading.

Regarding customers, WazirX says it is working with authorities to recover the funds and claims the event is a force majeure event beyond its control. The implications of this statement are not entirely clear, but it suggests that the firm may not plan to reimburse customers. That claim may end up being tested in a future legal process. This event is another reminder that crypto investors should exercise extreme caution when leaving funds on exchanges that will not be used for trading. In May, Forbes published a list of the 20 most trustworthy crypto exchanges in the world (WazirX was not on it). 

Finally, it underscores the need for regulators worldwide to produce clear guidance for companies in the name of consumer safety. “There is no crypto-specific regulation in India so far, and the industry would benefit from clear regulatory expectations on issues like security standards, risk management, and consumer protection," Joanna Cheng, associate general counsel at Fireblocks said in an interview with CoinDesk. “Regulatory intervention in this space would also mean that exchanges that service large numbers of retail customers are held accountable for their actions (or inaction).”