As the U.S. election on November 5, 2024, nears, the cryptocurrency sector stands at a crucial turning point. With just weeks left before Americans vote, the sharp difference between Donald Trump’s and Kamala Harris’s stances on digital assets signals a major shift ahead for the crypto world. Experts are already weighing the potential outcomes of each candidate’s victory on blockchain technology and digital currencies in the U.S.

Trump, once a vocal Bitcoin critic, has reversed his stance. He now champions cryptocurrency, accepting crypto donations and proposing bold policies. His plans include turning the U.S. into a leader in Bitcoin mining and creating a national Bitcoin reserve. In contrast, Vice President Harris had been largely quiet on crypto until recently.

At a Wall Street event in September, Harris voiced support for the crypto industry while stressing the need for consumer protection. Shortly after, she shared her vision of an “opportunity economy” that integrates digital assets and AI, aiming for U.S. leadership in blockchain technology.

This emerging bipartisan support for crypto has caught the attention of industry figures. Uniswap’s founder, Hayden Adams, praised Harris’s forward-looking view, setting it apart from President Joe Biden’s more cautious stance. Yet, some, like analyst Gautam Chhugani from Bernstein, believe Harris’s policy needs more clarity. He suggests that under Trump, the crypto sector could see stronger momentum.

$2 Trillion Crypto Market Defies Election Political Flux

As the election approaches, financial experts have differing opinions on its potential effects. Matt Hougan, CIO at Bitwise, remains optimistic regardless of the outcome. He believes that cryptocurrency will thrive no matter what happens in November. According to Hougan, the negative stance of Washington toward crypto is fading, as both political parties have shown support. He also noted recent easing of custody rules for certain banks.

“I’m increasingly of the view that, generally speaking, crypto wins no matter what happens in November,” said Hougan during an interview with The Block

Similarly, Eliézer Ndinga, Head of Digital Assets at 21Shares, agrees. He highlighted that digital assets have reached a $2 trillion market with over 500 million users, surviving multiple political shifts. Nonetheless, Hougan admitted that uncertainties around a possible Harris administration could create temporary market setbacks until new regulatory leaders are established.

Meanwhile, broader economic factors like global money supply growth, China’s stimulus measures, and potential U.S. interest rate cuts may outweigh political noise. These economic forces, along with ongoing tech advances, are likely to shape the future of the crypto market more significantly.

Crypto’s Destiny Hinges on Leadership’s Direction

Regardless of the election’s outcome, the crypto market is expected to maintain an overall positive trajectory. However, experts foresee different fates for Bitcoin and altcoins under varying leadership. Matthew Sigel, who leads Digital Assets Research at VanEck, predicts that Bitcoin may gain from potential U.S. debt rating downgrades and tighter fiscal health oversight by treasury buyers. On the other hand, he points out that altcoins’ performance could hinge more on who wins the election, with Trump’s policies likely supporting proof-of-stake coins.

James Butterfill, Head of Research at CoinShares, contends that another Trump term could weaken the U.S. dollar due to protectionist policies and inflationary trade moves. This scenario, he suggests, would boost Bitcoin as a hedge against a devaluing dollar. Additionally, Trump and his vice-presidential pick J.D. Vance’s pro-crypto stance might foster a friendlier regulatory space for digital currencies.

By contrast, Butterfill believes a Harris presidency might bring a more measured approach to crypto regulation, setting her apart from President Biden’s critical stance. Yet, Harris’s vague position on the matter could create uncertainty for digital assets. This might work in Bitcoin’s favor while potentially tightening the grip on altcoins, which could face tougher regulatory challenges.

Crypto Voters Propel Election’s Historic Impact

This election cycle marks a significant milestone as the first to be influenced by crypto voters, according to Samir Kerbage, CIO of Hashdex. The outcome of the US election will “without a doubt impact the immediate future of the crypto asset class,” though Kerbage believes this is more related to ending market uncertainty than the specific policies of either candidate. He added, “We believe the shift from the current administration to the next will be a net positive for investors in this space.”

Zach Bradford, CEO of Bitcoin miner CleanSpark, shares a similar view. In a recent interview with Bernstein analysts, Bradford predicted that Bitcoin could peak near $200,000 this cycle, regardless of who wins the presidency. He attributes this potential growth to expected aggressive rate cuts by the Federal Reserve in the next 15 to 16 months, which could benefit Bitcoin regardless of the election outcome.

Kyle Schneps, VP of Public Policy at Foundry Digital, emphasizes that while Bitcoin and crypto will succeed under either president, the question is whether the US will be at the forefront of the industry. 

“Trump has surrounded himself with advisers who are all unabashedly pro-crypto and this has shown great promise for the industry in the U.S. should he win,” Schneps noted. 

This is reflected in the growing popularity of the Polymarket betting platform. It currently has Trump, just ahead as the likely candidate to win, however, the odds have gone back and forth.

Source: Polymarket

Long-Term Strategies for Crypto Success

The presidential election holds considerable significance for the crypto industry, yet experts emphasize that its long-term prospects hinge on broader factors than just one administration. Joe Kelly, co-founder and CEO of Unchained, a Bitcoin financial services firm, views Bitcoin as politically neutral. He believes its values align with America’s foundational principles. “Bitcoin represents what our founders would have supported if it existed in their time,” Kelly stated.

Jameson Lopp, co-founder and CTO of Casa, a Bitcoin security provider, warns against over-reliance on campaign rhetoric. He notes that Bitcoin has rarely been a focus in previous elections and likely wouldn’t be this time if the current administration hadn’t targeted the sector so aggressively. Lopp added that although Harris promises to support innovation, key figures involved in Operation Choke Point 2.0 will likely remain influential if she wins.

Venture capitalists, while optimistic about the industry’s future, agree the election outcome could influence its growth pace. Joe McCann, founder of Asymmetric, a crypto venture firm, suggests that a Trump victory would likely accelerate Bitcoin’s rise past $100,000 due to his pro-crypto stance.