The revival of the cryptocurrency market 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 upwards swing is approximately double that seen by Bitcoin and Ether.
As of Friday afternoon ET, Sol is trading at $170 and XRP at $0.6.
The primary reason for the price surge is likely Donald Trump’s increasing electoral chances. Prediction markets—which research suggests may be, on average, more accurate at forecasting political outcomes than polls—have boosted their predictions of Trump becoming the next president to 63% and 64%, according to Polymarket and PredictIt respectively. The increased odds—which were at around 54% and 51% on June 4—coincide with the Republican National Conventional, which took place this week days after a gunman sought to assassinate Trump at a rally in Pennsylvania.
“The recent pump is due to overall market sentiment improving, and increasing odds that it and its ecosystem tokens won’t be viewed as securities by the Trump admin,” Rennick Palley, founding partner at venture capital firm Stratos, told Fortune.
According to CoinMarketCap, the top 10 XRP spot trading pairs have amassed approximately $864 million in trade volume over the past 24 hours, reflecting a 174% increase since July 7th. Additionally, XRP page views increased by 116% this week, according to CoinMarketCap.
What’s behind the electoral odds
Trump’s electoral odd are looking up for several reasons. For one, in light of the shooting, the Democrat’s campaign strategy must somewhat change course, as they can no longer accuse Trump of being a divisive figure with the same vitriol. Moreover, some Republicans have been quick to position President Joe Biden’s rhetoric as a key reason for the shooting, despite this being an unfounded claim.
“Today is not just some isolated incident. The central premise of the Biden campaign is that President Donald Trump is an authoritarian fascist who must be stopped at all costs,” Ohio Sen. J.D. Vance, and Trump’s vice presidential pick, said on X shortly after the shooting. “That rhetoric led directly to President Trump’s attempted assassination,” he added.
In addition, Trump’s electoral chances have benefited from growing calls among Democrats for Biden to rethink his election bid due to concerns related to his age. While the worries have been building for months, a bout of Covid forced Biden off the campaign trail, and triggered some of the party’s most prominent figures to suggest he reconsider. House Speaker Nancy Pelosi and former president Barak Obama have said the party may lose its chances of seizing control of the House if he remains in the 2024 race, it was reported this week.
The Trump trade
The crypto industry has mounting evidence that a Republican administration would mark a major inflection point for how digital assets are regulated in the U.S.
Trump has courted Bitcoin miners and called for the industry to be America-first. He’s encouraged crypto donations to his campaign. Next week, he’ll set out his vision for crypto in America at Bitcoin 2024 in front of 30,000 industry fans. And this week, he selected a vice president who owns anywhere between $136,000 and $390,000 in Bitcoin, with a track record of pushing for industry-friendly crypto regulation.
In light of the electoral outlook, traders may be paying extra attention to Solana as the Securities and Exchange Commission’s deadline for ruling on spot Solana exchange-traded funds is next March. Due to the absence of a Solana futures market, the likelihood of the SEC under a Biden administration approving the instruments is very unlikely. Thus, the applications for the ETFs are “largely a bet” on Trump winning the election, James Seyffart, Bloomberg’s ETF research analyst, previously told Fortune.
Wider trends fueling prices
Another reason why Sol may be up more than other tokens is because it’s become the go-to blockchain for memecoins, a corner of crypto which often sees the greatest price swings during periods of market invigoration. Solana-based memecoins have been skyrocketing this week, with popular tokens dogwifhat, Bonk and Donald Tremp up 62%, 36%, and 15%, respectively, according to CoinGecko data.
But zooming out beyond just this week, another factor behind why Solana has been on an upwards price trajectory this year is the increase in decentralized finance, or DeFi, activity on the network. Since the year’s start, the total value locked from DeFi on Solana has more than tripled to over $5 billion, according to DeFiLama data.
“While SOL was previously driven by meme mania, the uptick in DeFi activities is now bringing substantial vitality to the network,” Alice Liu, research lead at CoinMarketCap told Fortune.
When it comes to XRP, another factor behind its exuberant rise this week may the “signs of resolution” in its ongoing legal battle with the SEC, Pat Doyle, Blockchain Researcher at Amberdata, told Fortune.Of the lawsuit filed by the SEC in 2020, Ripple’s CEO Brad Garlinghouse told Bloomberg on Wednesday: “The ruling has been clear from the judge. There is one final piece about these investment contracts sold to institutions. We expect a resolution very soon, but we can’t predict exactly when the judge will rule there.” Moreover, prominent crypto attorney Fred Rispoli has predicted that July 31 may be the date for the judge’s final ruling.
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