U.S. Presidential Elections: The Implications for Crypto

Another exciting year for the crypto market is still in its making, with popular cryptocurrencies already showboating their impressive price action so far. Most significant was ‘s move, as the coin managed to break to a new all-time high level.

Although corrected lower, it still remains positive on a year-to-date basis. Crypto traders are keeping an eye out for opportunities, especially as important economic and political events are looming. Admittedly, the U.S. elections are, without a doubt, the key political event anticipated by politicians and investors alike as the results can potentially rattle the financial markets.

There are only two possible outcomes—Trump or Harris. In this report, we will discuss each scenario’s pros and cons based on how the crypto market could respond to each situation and, in general, to the presidential elections.

Past presidential elections and crypto companies

In 2016, during the Trump-Clinton election campaign, no major movement was observed within the crypto market as Bitcoin advanced marginally after the results were announced. However, the crypto market back then was not as developed as it is today. Its engagement by investors and traders was not as vibrant as it is today, so a comparison may be misleading. 

Therefore, it is more relevant to look at the Trump-Biden campaign of 2020. At that time, the market had already boomed previously in 2017, but once again, risky assets like Bitcoin never really budged. What is very different compared to previous elections is that now cryptocurrency companies like Coinbase (NASDAQ:) and Ripple are giving away a lot of money to support candidates who are more likely to help the crypto industry if elected. A report by CNBC stated that crypto companies have dedicated some $119 million towards influencing federal elections.

If Trump wins

Donald Trump has already included crypto as a tool in his campaign. He made headlines while attending the Bitcoin conference in Nashville in July. His sheer attendance at this event was already extraordinary in its own sake and made it reasonable to consider him a pro-crypto candidate of the elections.

At the conference, Trump made it clear that he was supporting and embracing crypto technology, ending his negative views on digital assets. He stated that if the U.S. doesn’t dominate the crypto market, then China will, turning the matter into a geopolitical concern. Trump also used the event to announce his plan to turn the U.S. into the ‘crypto capital of the planet and Bitcoin superpower of the world’, making this statement a highlight of his speech. The crowd welcomed the announcement and responded positively to the news.

Trump understands that the crypto market has come a long way since its beginning and that Bitcoin, , and other coins have gained tremendous value in the process. He is aware that crypto investors have quadrupled within the past decade and that he can personally benefit from these circumstances, as he admitted to accepting donations in Bitcoin. Yet, putting aside the event, Trump has not published his plans for crypto in detail, making it challenging for us to examine his proposals clearly. 

‘It remains to be seen whether he is truly willing to support the crypto market or if he is just trying to entice the crypto industry to support him and crypto enthusiasts to vote for him. No matter the case, the main aspects of his speech certainly coincided with the interests of millions of crypto investors worldwide’, said Kar Yong Ang, Octa analyst.

If Trump’s plan actually materialises, it could open the doors for further investment and expansion of the digital asset market. Thus, for the reasons mentioned above, if Donald Trump wins in November, we may see prices of cryptocurrencies appreciating in value—possibly substantially. ‘I will not be surprised if sets a new all-time high in 2025’,  said Kar Yong Ang, a financial market analyst at Octa Broker.

If Harris wins

Unfortunately, Kamala Harris’s plans for the cryptocurrency industry remain unclear thus far. Harris has refrained from making public announcements regarding cryptocurrencies, which could be regarded as a sign of her sceptical approach towards the subject. Moreover, Harris is currently the U.S. Vice President (VP), which, in a way, keeps her tied to the current Biden administration, which has not been particularly friendly to the crypto market.

However, according to a Bloomberg report, various important figures in the crypto industry have already approached the Harris campaign and shared their opinions and concerns over the industry. This may suggest that Harris is willing to be flexible on the matter as opposed to the Biden administration. This also tells us that Kamala Harris understands the importance of cryptocurrencies, especially given that 40% of American adults own digital coins.

In August, the Democratic party organised a virtual town hall event featuring the ‘Crypto4Harris’ motto. During the event, Chuck Schumer, a prominent Democratic senator, claimed that passing legislation favouring the crypto market may be feasible before the end of 2024. Other than that, traders have little to work with.

From another angle, Harris is already in a position to take action to support crypto. As a VP, Harris already has the power to influence the crypto market with her actions or simple general support. ‘For the time being, Harris has remained quiet on the matter, which could lead some to assume she keeps a negative stance on the crypto market. However, precisely because she does not have a principal position yet, her sentiment could change instantly. In my personal view, Kamala Harris will be under pressure to open up on her plans for the crypto market, which is also a great way for her to attract more votes’, said Kar Yong Ang, a financial market analyst at Octa Broker.

Proceed with caution

In another scenario, if the election keeps traders in suspense and the final results are delayed, then cryptocurrencies could come under extensive volatility with wide price swings coming into play. Indeed, one of Bitcoin’s characteristics is performing large price movements unexpectedly. This behaviour has been observed multiple times in the past, and the presidential elections can create the necessary impulse for strong moves of large magnitude.

An uncertain outcome of the presidential elections may lead to increased risks for traders, but it can equally create great openings for profits. More specifically, if Bitcoin tests important technical levels, such as 50,000 or 63,000, it could be useful for traders to set up strategies that consider these levels when opening or closing trades. Being mindful of such trading levels can also help when using pending orders. Another example could be , an asset that has been moving sideways in 2024. Some traders could identify how wide this range can go and open trades only when important levels are reached.

Conclusion

From a trading perspective, it is vital for traders to monitor the crypto markets’ reactions to important events as we get closer to the elections. September and October could set the tone for the actual impact in November when the results are announced. Also, keep in mind that September has traditionally been a bearish month for Bitcoin, as since 2019, we have seen four red months and only one green month.

In addition, the market awaits a crucial FOMC meeting due on 18 September. This event will be very interesting as the odds are stacked for a possible rate cut. Another big event to monitor is the presidential debate on 11 September at 1:00 a.m. UTC. Harris and Trump may discuss important themes in the 90-minute discussion, including their stance on the crypto industry. BTCUSD may move sharply during the debate due to its inherent volatility. 

On balance, it is clear that U.S. politicians can no longer ignore the crypto industry. Lots of crypto money has been invested in the elections because crypto companies depend on the results of these elections. Some of these firms are going through intense legal battles, which could even lead to an existential threat. So, these firms clearly understand that the president coming into power will have the responsibility to upgrade regulations and support the industry. The crypto industry’s longevity and expansion now truly depend on the policies that the newly elected president of the U.S. will pursue.