The US election in 2024 promises to bring many changes to the lives of people around the world. However, we are not here to discuss migration policy or social programmes. Our task today is to look at how each of the presidential candidates feel about cryptocurrencies and what the market can expect from the election of Trump or Harris.
This article will be a short squeeze and a summary of the CVEX team's opinions. So if you are doing fundamental analysis for trading, we recommend reading the original publications and documents. DYOR.
Cryptocurrencies have long been a distinct financial, social, and cultural phenomenon. People from all over the world, from Japan to Nigeria and from Canada to Indonesia, are rallying under yellow banners with a black "B" on them. However, in the last presidential election, which took place in 2020, the topic of cryptocurrencies did not take any significant place in the candidates' programmes. It seemed that serious people from politics just ignored crypto-enthusiasts as if it was a child's play. But today, everything has changed. Both Democrats and Republicans are actively communicating with the crypto community to get it on their side. So what has happened?
Let's turn to the statistics. Recent polls on Statista show that the number of people in the U.S. who own or have owned cryptocurrencies has literally doubled in the last four years. In 2020, the ownership percentage was just under 8%. Today, however, that number has passed 16%.
Moreover, there is an interesting breakdown of these people by state, including swing states. Thanks to Coinbase, we know that the top 10 states by number of cryptocurrency holders are California, New Jersey, Washington, New York, Colorado, Utah, Florida, Alaska, Nevada, and Massachusetts. That said, three of these are swing or have been so, according to researchers in past years, including Florida, Nevada, and Colorado.
Unsurprisingly, given the new landscape, politicians are trying to win the loyalty of new audiences by promising all sorts of support. We will see what exactly they are promising next. In the meantime, it is important to understand that despite all the statements, no one can guarantee that Trump or Harris's theses will be fulfilled. Therefore, all of the following may remain ink on paper.
Donald Trump’s recent shift towards embracing cryptocurrency marks a notable change from his earlier scepticism. Guided by advisors like David Bailey, CEO of Bitcoin Magazine, Trump has positioned himself as a strong advocate for the crypto industry. This shift aligns him with key figures in the tech world, such as Elon Musk and Peter Thiel, who have a vested interest in the success of digital assets like Bitcoin.
Trump’s pro-crypto stance is not only a political manoeuvre to gain support from the growing community of crypto investors but also a reflection of a broader strategy to differentiate himself from the regulatory-heavy approach of the Biden administration. His promises to deregulate the industry, fire SEC Chair Gary Gensler, and make the U.S. the global hub for cryptocurrency could have significant implications for the market. If these promises are fulfilled, they could lead to increased market confidence and investment, positioning the U.S. as a leader in the global digital economy.
However, there are also concerns about the practicality of some of Trump’s proposals, particularly his pledge to keep all the U.S. government’s Bitcoin holdings. While his rhetoric may boost short-term investor optimism, the long-term impact on the market remains uncertain, especially if regulatory clarity is not achieved.
As the Democratic presidential nominee, Kamala Harris faces the complex challenge of positioning her campaign to appeal to the growing community of crypto investors while maintaining a balanced approach to regulation. With President Joe Biden having taken a relatively stringent stance on cryptocurrency, Harris must navigate the expectations of both crypto advocates and skeptics within her party.
If Harris successfully navigates these challenges and positions herself as a moderate, yet forward-looking candidate on cryptocurrency, she could appeal to a broader base of voters who are invested in the future of digital assets. However, the tension within her party over how to handle crypto regulation could complicate her efforts. Harris’ ability to unite the party on this issue while offering a clear and strategic vision for the future of crypto in the U.S. could be a determining factor in the 2024 election.
The United States holds a pivotal role in the global cryptocurrency market, making its presidential elections crucial for the future of digital assets like Bitcoin. As the largest economy and a key player in financial markets, the U.S. significantly influences Bitcoin through its regulations, market involvement, and economic strategies.
A clear example of this influence is the U.S. government's ability to regulate major cryptocurrency platforms such as Binance. The recent case against Binance, which led to a $4 billion settlement, underscores how U.S. actions can steer the global crypto landscape, affecting Bitcoin’s market behavior and investor sentiment.
Moreover, with the U.S. financial markets accounting for over 42.5% of the global market and the U.S. dollar serving as the world’s reserve currency, most Bitcoin transactions are conducted in dollars. This reinforces the U.S.'s power over Bitcoin, especially as the potential approval of Bitcoin ETFs by U.S. regulators could further institutionalize the digital asset, increasing its demand and integration into traditional investment portfolios.
While the institutionalization of Bitcoin in the U.S. could boost adoption and market demand, it also challenges Bitcoin’s decentralized nature by bringing it under the control of established financial institutions. However, this regulation also aims to provide a safer environment for investors, reduce fraud, and enhance Bitcoin’s credibility.
In essence, the U.S. presidential election will likely determine the future of cryptocurrency regulation and market conditions. The policies the U.S. sets will have significant implications for Bitcoin and the global crypto market, making this election particularly important for all stakeholders in the digital asset space.
“We are also increasingly optimistic that the next administration, whether Democrat or Republican, will be constructive on crypto. The rhetoric has shifted,” said Brian Armstrong, CEO of Coinbase.
As the U.S. heads into another pivotal election, the future of cryptocurrency hangs in the balance. Both Trump and Harris represent starkly different paths for digital assets, with Trump’s pro-crypto stance potentially accelerating Bitcoin’s institutionalization, while Harris’ approach remains more cautious, emphasizing regulation and consumer protection. The outcome of this election will shape the landscape of crypto regulation and adoption in the U.S., making it a critical moment for investors and the broader crypto community.
