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Solana and XRP Jump Over 20% in a Week, Riding Trump’s Election Odds
The cryptocurrency market rally this week has reached far beyond Bitcoin. Sol, the native token of the Solana blockchain, is up 22%, and Ripple’s XRP has jumped 25%, according to CoinGecko data. This upward swing is roughly double that seen by Bitcoin and Ether.
As of Friday afternoon ET, Sol was trading at $170 and XRP was trading at $0.6.
The main reason for the price spike is probably Donald Trump increasing electoral chancesPrediction markets, which research suggests may be, on average, more accurate at predicting political outcomes than polls, have increased their forecasts of Trump as the next president to 63% and 64%, according to Polymarket AND Predict it respectively. The increased odds, which were around 54% and 51% on June 4, coincide with the Republican National Convention, which took place this week, just days after a gunman attempted to assassinate Trump at a rally in Pennsylvania.
“The recent surge is driven by improving overall market sentiment and an increased likelihood that it and its ecosystem tokens will not be deemed securities by the Trump administration,” said Rennick Palley, founding partner of venture capital firm Stratos., he told Fortune.
According to CoinMarketCap, the top 10 XRP spot trading pairs have accumulated approximately $864 million in trading volume over the past 24 hours, reflecting a 174% increase since July 7. Additionally, XRP page views have increased by 116% this week, according to CoinMarketCap.
What’s Behind the Election Odds
Trump’s election odds are improving for several reasons. First, in light of the shooting, Democrats’ campaign strategy needs to change course, as they can no longer accuse Trump of being a divisive figure with the same vitriol. Second, some Republicans have been quick to point to President Joe Biden’s rhetoric as a major reason for the shooting, even though that claim is unfounded.
“Today is not just an isolated incident. The central premise of Biden’s campaign is that President Donald Trump is an authoritarian fascist who must be stopped at all costs,” said Ohio Sen. J.D. Vance, Trump’s vice presidential pick. he said on X shortly after the shooting. “That rhetoric led directly to the attempted assassination of President Trump,” he added.
Trump’s election chances have also benefited from growing calls among Democrats for Biden to reconsider his candidacy due to concerns about his age. As concerns have been mounting for months, a bout with Covid forced Biden to leave the campaign trail and prompted some of the party’s most prominent figures to suggest he reconsider. House Speaker Nancy Pelosi and former President Barack Obama have said the party could lose its chances of taking control of the House if he stays in the 2024 race, it was reported this week.
Trump’s Trade
The cryptocurrency industry has growing evidence that a Republican administration would mark a major turning point in how digital assets are regulated in the United States.
Trump has courted Bitcoin miners and called for the industry to be America-first. He has encouraged cryptocurrency donations to his campaign. Next week, he will lay out his vision for cryptocurrency in America at Bitcoin 2024 in front of 30,000 industry fans. And this week, he picked a vice president who holds between $136,000 and $390,000 in Bitcoin, with a track record of promoting industry-friendly crypto regulation.
Given the election outlook, traders may want to pay particular attention to Solana, as the Securities and Exchange Commission’s deadline to rule on Solana’s spot exchange-traded funds is next March. Because of the lack of a Solana futures market, the likelihood of the SEC approving the instruments under a Biden administration is very unlikely. As such, ETF applications are “largely a bet” on Trump winning the election, Bloomberg ETF research analyst James Seyffart previously told Fortune.
Broader trends fuel prices
Another reason Sol may be rallying more than other tokens is because it has become the go-to blockchain for memecoins, a corner of cryptocurrency that often sees the biggest price swings during periods of market uptick. Solana-based memecoins have skyrocketed this week, with popular tokens dogwifhat, Bonk, and Donald Tremp up 62%, 36%, and 15%, respectively, according to CoinGecko data.
But beyond this week, another factor explaining why Solana has been on an upward price trajectory this year is the increase in decentralized finance, or DeFi, activity on the network. Since the beginning of the year, the total value locked by DeFi on Solana has more than tripled, surpassing $5 billion, according to DeFiLama data.
“While SOL was previously driven by meme mania, the rise of DeFi activity is now bringing significant vibrancy to the network,” Alice Liu, head of research at CoinMarketCap, told Fortune.
As for XRP, another factor behind its exuberant rise this week could be the “signal of resolution” in its ongoing legal battle with the SEC, Pat Doyle, Blockchain Researcher at Amberdata, told Fortune. Regarding the SEC lawsuit filed in 2020, Ripple CEO Brad Garlinghouse told Bloomberg on Wednesday: “The ruling was clear from the judge. There’s a final piece to these investment contracts sold to institutions. We expect a resolution very soon, but we can’t predict exactly when the judge will rule on this.” Additionally, prominent cryptocurrency lawyer Fred Rispoli has expected that July 31 could be the date of the judge’s final ruling.