Trump’s Crypto Plans: AddVance ⏩
Plus: Get ready for Ether ETFs
In this week’s edition of The Context, Trump adds a pro-crypto VP nominee, Silicon Valley execs support the former president, and Ethereum ETFs are coming.
[Vance’s VP Victory? ✌️]
Former President Donald Trump kicked off the Republican National Convention by naming Ohio Senator JD Vance as his running mate on the Republican ticket, burnishing his blockchain bona fides.
What Journalists Said 🧑💻:
“If Donald Trump wins the presidential election in November, America will have its first crypto Vice President,” said Niamh Rowe (Fortune). The Ohio junior senator owns between $100,000 and $250,000 in BTC, according to a recent financial disclosure.
He’s not just an investor. He’s also an advocate. “Vance, a venture capitalist and the author of ‘Hillbilly Elegy,’ won his 2022 primary after running as a crypto ally,” wrote Eleanor Mueller (Politico) in June. “Last year, he introduced a bill that would shield banks from regulatory pressure to cut off crypto customers.”
This pick “is the strongest signal yet that an overhaul of America’s flawed crypto regime is imminent,” opined Alex O’Donnell (Cointelegraph). “Crypto’s exclusion from regulated financial markets has been central to virtually all of the industry’s shortcomings. That will soon change, and adoption will dramatically accelerate … The U.S. will greatly benefit.”
PR Perspective 🔎:
Candidates typically get a polling boost during and after a party convention. With his VP selection, Donald Trump is hoping for a boost with several demographics, including crypto voters. Judging from early returns, the pick was a hit.
[Tech’s Trump Turn? 👂]
Several tech leaders endorsed Donald Trump after the failed assassination attempt against him, a trend that continued after he added JD Vance to the ticket.
What Journalists Said 🧑💻:
Trump is consolidating support in Silicon Valley because execs “have been upset about how the Biden administration has gone after big tech and regulated cryptocurrency,” wrote Dana Mattioli, Preetika Rana, & Emily Glazer (WSJ). Elon Musk pledged “around $45 million a month to a pro-Trump super political-action committee called America PAC” and a16z founders Marc Andreessen and Ben Horowitz are also committing big sums.
Yet “Silicon Valley is not undergoing a seismic rightward shift,” argued Nicole Narea (Vox). The region’s VCs are still spending more on Democrats this cycle. It’s just that some “billionaires are becoming more vocal in their support of Trump just because they can without suffering boycotts or lots of bad press.”
It’s true that most of the attention is on big names, said Sander Lutz (Decrypt). Fundraising filings show the former president took in $3.3M in crypto donations last quarter. Donors included Kraken co-founder Jesse Powell, Gemini co-founders Cameron and Tyler Winklevoss, and Messari CEO Ryan Selkis. But just 0.3% of that $3.3M “came from ordinary donors who were not high-ranking executives in the crypto industry.”
PR Perspective 🔎:
Big-name endorsements from people with big platforms (such as X) are propelling a narrative that Donald Trump is winning over the tech and crypto industries. But there’s a long way to go before the November election and plenty of time for contrasting narratives to gain traction.
[Enter ETH ETFs? ⁉️]
One of the crypto industry’s biggest gripes has been with the SEC. But the agency is set to allow Ethereum exchange-traded funds to begin trading on July 23, according to Bloomberg analyst Eric Balchunas.
What Journalists Said 🧑💻:
Two sources told us the same, said Helene Braun (CoinDesk). That means the SEC has no more questions about prospective issuers’ S-1 filings. But we have questions, given that most issuers “have yet to disclose some of the details, including how much management fee they will be charging investors.”
How did this happen? A recap: “Ever since the successful launch of spot bitcoin ETFs in January, a host of financial institutions have been trying to secure approval for an exchange-traded fund that allows investors to wager on the price of Ethereum without having to buy the cryptocurrency directly,” wrote RT Watson & Jason Shubnell (The Block).
“Executives initially had low hopes that the SEC would greenlight the products after discouraging meetings with officials” last year, wrote Suzanne McGee & Hannah Lang (Reuters). “But the agency surprised the industry in May when it approved rule changes required for exchanges to list the products, the first of two key regulatory hurdles.”
PR Perspective 🔎:
Expect lots of coverage comparing the market for Ethereum ETFs to the success of Bitcoin ETFs. But Bitcoin has a much largest market cap than Ether and is a very different type of asset. Take the comparisons with a grain of salt.
[Tweet Of The Week]
Credit: https://x.com/medeana
[DeFi Definitions]
A segment exploring one particular aspect of DeFi. View previous entries here.
This week: ‘Flippening’ by Andrew Wickerson.
The Flippening refers to the hypothetical moment when Ethereum's total market capitalisation surpasses Bitcoin’s. The term originates from the 2017 bull market when Ethereum set a then-record high of $881.94 and symbolises confidence in Ethereum's strengths, from the foundations it created for developers to the more recent layer 2s built atop it. In this sense, one could argue that Ethereum has embraced modularity, while Bitcoin has embraced a monolithic design.
But while Ethereum has surpassed Bitcoin in metrics like transaction count and fees generated, it has yet to overtake Bitcoin in key areas such as trading volume, Google search interest, active addresses, and overall market capitalisation. The likelihood of the Flippening hinges on factors such as Ethereum's total supply, its use cases relative to Bitcoin's, and shifts in market dynamics.
Currently, no other layer 1 blockchain comes close to competing with the usability that Ethereum offers. Therefore, it offers the most realistic chance of replacing Bitcoin’s dominance. That said, although some experts foresee the Flippening occurring, many do not
The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
The team: Founder Samantha Yap and consulting editor Jeff Benson, Andrew Wickerson, Ewan Brewster, Emma Murphy and Delon Chan. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.