The study of economics is very much a discipline in human behavior. Throughout history, seismic events like the 9/11 terror attacks and the COVID-19 pandemic have greatly impacted global financial markets through above-average volatility. Driven by fear and uncertainty, increased volatility caused by individual events or a series of events causes major price fluctuations and injects added risk into financial markets.
While crypto is a nascent industry with vague and developing regulatory frameworks, its market is also greatly influenced by events both inside and outside its industry bubble.
In late June, when President Biden and former President Trump took to the debate stage for the first time in the 2024 U.S. presidential election cycle, Biden’s objectively poor performance tilted polls in Trump's favor. However, the attempted assassination of Trump a few weeks later provided him with the political capital to take a more commanding lead over Biden—odds makers set an implied probability of his re-election at 75 percent.
Two days after the shooting, Trump, already viewed as a pro-crypto candidate, tapped Senator J.D. Vance to be his running mate. Vance’s vocal support for pro-crypto policies excited many enthusiasts, ushering in real hope for a crypto-friendly regime in the White House next year.
In the aftermath of Trump being shot and the Vance nomination, we’ve seen spikes in Bitcoin and most other tokens. It’s no secret that Vance, who holds Bitcoin and once said that the U.S. is a “regulation by enforcement” regime, would enjoy being the architect for any future crypto legislation.
If a Trump-Vance presidency intends to defang the SEC and create a more crypto-friendly regulatory environment—as many are wishing and anticipating—expect a heightened demand for crypto trading and investing platforms.
This series of events creates a sentiment that pro-crypto policies are likely, undoubtedly driving adoption and increasing DeFi (decentralized finance) activity in particular. Since the crypto crash of 2022, DeFi has been one of the most transformational sectors within the broader blockchain ecosystem, introducing new and creative tools to interact with digital assets.
Despite the value created by scaling solutions, futures, innovative staking approaches, DePIN (decentralized physical infrastructure network) advancements, and more, DeFi still has room to grow, especially if there is a new participant influx. As the sector matures and becomes better equipped to handle legal compliance, there are still only 1,243 DeFi protocols with at least $500,000 in TVL (total value locked), and only 6,598 yield-generating pools with at least $100,000 TVL, according to DeFiLlama data as of July 18.
This highlights the need for an expanded DeFi infrastructure that can help facilitate increased liquidity. Simply put, DeFi protocols are too isolated and there is a need for more platforms that host a wider range of investing and trading options.
Furthermore, DeFi’s general UX still needs to be simplified for any regular individual to navigate, leading to losing potential users and investors who would have otherwise been interested.
Fortunately, while more progress is needed, the industry is headed in the right direction. Platforms like Thalex, which specialize in derivatives trading, recognize the inefficiencies in the derivatives market and empower users with low transaction fees and a superior user interface to foster a robust ecosystem for seasoned and new crypto traders. With a focus on scalability, Thalex expands its market reach with strategic partnerships, demonstrated by its recent integration with Bitfinex, and integrations with some of the top exchanges, facilitating a broader range of trading opportunities.
While Thalex has developed a user-friendly platform for crypto derivatives, GT Protocol uses conversational AI to simplify crypto investing. Its comprehensive app, leveraging its AI execution technology, provides simplified access to CeFi, DeFi, and NFTs within a non-custodial environment for retail, institutional, and inexperienced investors. Its AI-powered chatbot acts as a personal investing assistant, escorting users through decisions and offering portfolio management all via simple commands.
No one knows what will happen in November, but the current buzz around a Trump re-election means that DeFi platforms, DEXs, and protocols must be ready for heightened transaction loads and onboardings of new users. Now is the time to start building new solutions, collaborating, adding new integrations, and improving the UX.