The upcoming 2024 U.S. presidential election has garnered intense attention from global market participants. This heightened focus is driven by the widely held belief that the election's outcome could wield a substantial impact, especially given the current global economic uncertainty. Each presidential candidate's economic policies diverge, potentially impacting geopolitics, interest rates, and the cryptocurrency industry. Geopolitical initiatives may enhance the global economy, while more conducive interest rate strategies are anticipated to stimulate economic expansion.
Kamala Harris, the Democratic Party candidate, is expected to continue President Joe Biden's policies and implement stricter regulations on cryptocurrency. On the other hand, Donald Trump, the Republican Party candidate, offers strong support for crypto, even promising to make the U.S. the crypto capital of the world, creating a stark contrast in crypto policy views between the two candidates.
Differences in Policy Between Candidates
Each presidential candidate has a different approach to fiscal and monetary policies, which can directly affect the value of the U.S. dollar and inflation rates. These two elements are crucial in determining the movement of the cryptocurrency market.
Candidates who support large fiscal spending are likely to raise inflation concerns, which may drive demand for Bitcoin as a hedge against inflation. Conversely, if a candidate’s economic policy is more conservative and focuses on budget reduction and interest rate hikes, crypto assets may experience downward pressure as investors may shift to traditional assets like bonds.
Donald Trump's Policy Position
Donald Trump has reversed his previous stance on cryptocurrency since his earlier term, now promoting the United States as the "crypto capital of the planet" in his 2024 presidential campaign. One of his strategic moves is launching a new platform related to crypto trading, World Liberty Financial, promoted by his family and poised for greater success if Trump is re-elected.
Additionally, Trump plans to push for deregulation in the crypto sector and block the establishment of a Central Bank Digital Currency (CBDC) proposed by the Federal Reserve. He also supports Decentralized Finance (DeFi) to expand the influence of blockchain technology in the traditional financial system.
Trump is also committed to lowering interest rates by exerting more influence over Federal Reserve policy, which would create more favorable conditions for crypto investors.
Kamala Harris' Policy Position
Kamala Harris, the Democratic Party’s presidential candidate, has yet to take a firm stance on crypto policy. While her campaign has engaged with crypto representatives and there is pressure from pro-crypto groups within her party, Harris tends to follow the strict approach adopted by President Joe Biden, focusing on regulations to ensure the stability and security of the financial system.
Harris has not specifically mentioned crypto in her latest policy plans, which focus more on economic innovation in general without highlighting digital or blockchain technology. This approach suggests that Harris may prefer to continue the strict regulatory policies while balancing the pressure from crypto supporters and young voters who are increasingly involved with digital assets.
If Donald Trump Wins
Trump's victory is anticipated to positively impact financial markets, including the cryptocurrency sector. He is known for his pro-deregulation stance and support for policies that encourage economic growth. His tendency to reduce regulations would benefit the crypto market, particularly with his tax cut policies remaining in effect until the end of 2025.
Traders may find opportunities to go “long” on the US dollar and interest rates, especially when comparing it to trading partners like China and Malaysia. However, it is important to consider the impact of Trump’s inflationary policies, such as the tariffs imposed on major trading partners.
If Kamala Harris Wins
Harris might adopt a more stable but conservative approach toward the financial sector. While she is more supportive of cryptocurrency than Biden, significant changes to crypto policy are not anticipated if she is elected.
Traders may prefer to take a “long” position on US government bonds (treasuries) while going “short” on the US dollar. Additionally, Harris is expected to be more cautious regarding deregulation, which could affect corporate earnings. This approach may slightly restrain the US equity market but could also help reduce geopolitical volatility.
The 2024 U.S. Election’s Impact on the Crypto Market
The 2024 U.S. presidential election is expected to have a significant impact on the crypto market, given the historical rise in risky asset prices like cryptocurrency before and after elections. Historically, elections often lead to price increases for assets like Bitcoin due to the rise in the money supply that triggers monetary inflation.
Bitcoin price increases following the victories of Obama, Trump, and Biden show that the crypto market often responds positively to political changes that support inflation or economic uncertainty.
Uncertainty ahead of the election can also affect the crypto market, especially if investors wait for clarity on the new president’s policies. If Kamala Harris, who leans towards stricter regulations, appears more likely to win, investors may delay making major investment decisions.
On the other hand, news or polls indicating a higher chance of Trump’s victory, who is more pro-crypto, could trigger price surges in the crypto market. Support from key figures in the crypto industry for pro-crypto candidates can also strengthen market sentiment.
Political, economic, and investor factors play a critical role in post-election crypto market dynamics. Candidates' views on cryptocurrency can influence prices, with pro-crypto candidates likely to drive positive sentiment. Political stability and macroeconomic conditions such as inflation and interest rates also contribute to market volatility. Additionally, increased investor and institutional participation can amplify the impact of presidential policies on Bitcoin and the crypto market as a whole.
Crypto Market Predictions After the Election
Predictions for the crypto market after the 2024 U.S. election indicate significant potential impacts on the industry. The 2024 election coincides with Bitcoin’s halving cycle, which has historically triggered a bull run about a year and a half after the halving.
If this pattern continues, the peak of the bull run could occur in late 2025. Pro-crypto policies from the elected president could reinforce this momentum, while stricter regulatory approaches from candidates like Kamala Harris might diminish the bull run’s effect.
Regulatory clarity is a crucial factor for the growth of the crypto industry. If the elected president implements crypto-friendly policies, positive sentiment, and investor confidence could increase, driving market growth.
Conversely, strict policies may cause volatility and reduce the number of retail and institutional investors. Favorable support for tokenization sectors, such as Real World Assets (RWA), could also provide an additional positive catalyst for the industry.
Overall, the 2024 U.S. election will be a pivotal moment for the future of crypto in the United States. The president’s choice will determine policy direction, which can impact the development and adoption of crypto. Investors and industry players must be prepared for potential changes depending on the election outcome and the policies adopted by the elected president.
Source:
Donald Trump Laid Out His Economic Plan This Week—What You Need to Know. Accessed in 2024. Investopedia.
Kamala Harris releases policy platform details — No mention of crypto. Accessed in 2024. Cointelegraph.
Trump's crypto-business: Could this create problems if he wins the election? Diakses pada 2024. Euro News.
Where Harris and Trump stand on cryptocurrencies — and how it could sway some American voters. Diakses pada 2024. The Conversation.
