Experts say the White House plays a pivotal role in shaping the future of cryptocurrencies, so the outcome of the US presidential election could impact the prices of Bitcoin and altcoins. According to the cryptocurrency prediction market Polymarket, Donald Trump has a higher probability of winning the US presidential election than Kamala Harris. Cryptocurrency regulation in the United States first surfaced during the election period, and experts say a Trump victory would definitely be an advantage for the industry. Ripple’s co-founder supports Harris as the company continues to battle the SEC over the status of XRP.
Americans are set to go to the polls to elect a new president on November 5th, and their choice could be key to the future of the cryptocurrency industry and, by extension, the price outlook for Bitcoin (BTC). While the role of cryptocurrencies and how they should be regulated in the country was largely ignored four years ago, the issue has become part of the agenda in the run-up to elections.
Former President and Republican candidate Donald Trump and current Vice President and Democratic candidate Kamala Harris appear to disagree on how to approach cryptocurrencies, at least based on their statements on the issue. Regardless of who sits in the White House, whether and how this asset class will be regulated in the coming years, as the U.S. Securities and Exchange Commission (SEC) is doubling down on its enforcement actions against the sector. There is a possibility of bringing about changes in terms of
Cryptocurrency prediction market favors Trump victory
Polymarket, a cryptocurrency betting and prediction market, gives former US President Trump a 63.7% chance of winning the election, while Kamala Harris has a 36.1% chance. Until October 4, Mr. Trump’s odds were steadily declining and Ms. Harris’s odds were rising, but then things turned in favor of the Republican candidate.
Winner of the 2024 US presidential election. Source: Polymarket.
Industry experts at Galaxy Research have gathered insights and commentary on how a Trump or Harris victory could impact cryptocurrencies, particularly regulation, as well as other related issues.
According to Galaxy Research, Trump is favorable towards cryptocurrencies.
Alex Thorne, head of research at Galaxy, published a policy scorecard on X that compares Trump and Harris on a variety of crypto-related issues. The scorecard identifies several key factors, from the SEC to tax issues to Bitcoin mining, and adds commentary on the current Biden administration’s stance and what approach the Harris and Trump administrations will take. I am doing it.
Mr. Thorne said that while Mr. Trump’s victory would be “definitely good for the industry,” it could also be good for the Harris administration, and he was optimistic about her victory as well.
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Publishes policy scorecard of Biden, Harris, and Trump positions on key Bitcoin and crypto issues
Bottom line: Trump is definitely an advantage for the industry, but we’re optimistic that Harris could be more supportive than Biden. pic.twitter.com/qNKeLtppcS
— Alex Thorne (@intangiblecoins) October 14, 2024
Crypto industry spends millions on donations: which side will Ripple and Coinbase choose?
Cryptocurrency companies Ripple and Coinbase have spent about $100 million to make crypto regulation a top issue for 2024 presidential candidates. Both companies donated almost all of their funds to political action committees (PACs) focused on supporting pro-crypto candidates.
OpenSecrets.org, a nonprofit that collates data on political campaign financing, lists companies and their donations with details on whether they were made to Republicans or Democrats.
Cryptocurrency sector companies and their donations
Reflecting the importance of the election, prominent crypto companies are making donations to both camps.
One of the co-founders of the money transfer company Ripple, which has been embroiled in a legal battle with the SEC for more than four years, has unequivocally supported Kamala Harris.
Ripple co-founder and executive chairman Christian Larsen has pledged $10 million in the company’s native token, XRP, to the Kamala Harris campaign’s political action committee (PAC). Larsen said he expects Democrats under Harris to have a “new approach to innovation.”
It’s time for Democrats to take a new approach to technological innovation, including cryptocurrencies. i believe @KamalaHarris It will ensure that American technology dominates the world. That’s why I’m donating $10 million in XRP to support her. https://t.co/vb9KJA87JK
— Chris Larsen (@chrislarsensf) October 21, 2024
Back in August 2024, Larsen announced he would donate $1 million to Future Forward, a California Democratic PAC.
Ripple CEO Brad Garlinghouse said of the election, “We need to immediately reverse course from the current administration’s misguided war on cryptocurrencies,” and said the company is promoting cryptocurrencies. He added that he would work with both Democrats and Republicans to advance the policy.
Why the US election will determine the future of ETFs: Expert commentary
Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, says exchange-traded fund filings for XRP and Solana (SOL) tokens are “not going to happen” if Kamala Harris wins, regardless of the issuer. .
Meanwhile, the odds of approval for ETFs tracking XRP and SOL could improve significantly under President Trump. Balciunas said a Donald Trump victory could create a “reasonable opportunity” for more crypto ETFs.
In a similar vein, Nate Geraci, president of ETF Store, said:
It seems highly unlikely that the Harris administration will approve additional spot crypto ETFs, at least not immediately after the election.
Observing President Joe Biden’s approach to cryptocurrencies, Geraci concluded that Democrats are being “belligerent” and that Harris is likely to stick with the status quo.
The White House is essential to promoting crypto regulation
Kyla Curley, a cryptocurrency expert and partner at global advisory firm StoneTurn, told FXStreet that historically digital assets have been more of a judicial enforcement issue than a political issue. He said that it will continue to have an impact on the US cryptocurrency market.
“The SEC has taken the lead in enforcement actions related to cryptocurrencies, but it remains unclear when, how, and by whom a new framework will be developed to stay ahead of global regulatory and financial trends. It remains unclear who will be responsible for the enforcement that emerges from those frameworks,” Curley said.
“This is a complex area, and it’s largely on hold while we wait to see what happens with the various bills that are going through Congress,” Curley said. “While the White House is one of the key aspects of driving regulatory policy, the environment also depends on the actions of people in the House and Senate,” she added.
The highlight of the current cryptocurrency cycle is the relationship between cryptocurrencies and US politics. Experts say this is new to the industry but could have a positive impact on regulatory outcomes.
Cryptocurrency’s growing influence in politics could have positive regulatory outcomes
Jake Ostrovskis, an OTC trader at Wintermute, told FX Street that a Trump victory could mean further deregulation, creating a more business-friendly environment for crypto companies. “The former US president is likely to prioritize financial innovation over strict oversight, but this may come at the risk of reducing investor protection,” he said.
If current SEC Chairman Gary Gensler is ousted, the SEC’s enforcement actions may become less stringent.
Meanwhile, Kamala Harris’ victory could lead to a continuation of a more cautious regulatory approach, with a focus on protecting consumers and ensuring compliance with existing financial regulations, Ostrovskis said.
“This signals the potential for integration of insights from the current administration’s enforcement-focused approach to cryptocurrencies,” he added.
“The influx of funds from crypto PACs and pro-crypto organizations highlights the growing influence of cryptocurrencies in politics,” Ostrovskis said. This could lead to more favorable regulatory outcomes for companies in the industry. ”
Opportunity for Democrats and Republicans to collaborate on cryptocurrency regulation
Regarding the possibility of both parties working together to advance the regulation of crypto assets, Ostrovskis said:
“Both parties have received contributions from pro-cryptocurrency organizations, creating a unique opportunity for bipartisan cooperation in developing clear and balanced regulations.”
This increased political engagement could also pave the way for policies that encourage innovation and broader adoption, such as tax incentives for crypto companies and frameworks that recognize the importance of decentralized finance (DeFi). , he said.
Whether it is Harris or Trump, moves to regulate cryptocurrencies are expected.
Curley said that regardless of who sits in the Oval Office in January, we should expect digital asset regulation to be back on the agenda.
“It was outdated and the industry was too big to continue operating with regulatory uncertainty,” she says.
Due to the lack of federal regulation, states such as New York have developed clear parameters for NYDFS bitlicensing, a measure that the next administration could apply at the federal level, Curley explains. .
“The United States has an opportunity to remain a world leader and show that regulation and compliance don’t have to come at the expense of innovation,” she says.
Bitcoin should do well, altcoins face Harris risks, likely to rally with Trump win
Thorne told Policy Scorecard that he expects Bitcoin, the largest cryptocurrency, to perform well regardless of the election outcome. But Thorne said altcoins (cryptocurrencies other than Bitcoin) face risks in a Harris administration scenario and could “see overperformance” under a Trump administration.
Crypto ETF FAQs
An exchange-traded fund (ETF) is an investment vehicle or index that tracks the price of an underlying asset. ETFs don’t just track a single asset, they can also track groups of assets or sectors. For example, a Bitcoin ETF tracks the price of Bitcoin. ETFs are tools that investors use to gain exposure to specific assets.
yes. The first Bitcoin futures ETF in the US was approved by the US Securities and Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still awaiting regulatory approval. The SEC said it has held off on issuing crypto-related futures ETFs over the past few years because the industry is new and susceptible to manipulation.
yes. The SEC approved the listing and trading of multiple Bitcoin Spot exchange-traded funds in January 2024, allowing institutional and mainstream investors to trade the leading cryptocurrency. This decision was hailed as a game changer by the industry.
The main advantage of crypto ETFs is that they have the potential to gain exposure to cryptocurrencies without ownership, reducing the risks and costs of holding assets. Other advantages include a shorter learning curve for investors and greater safety, as ETFs are responsible for securing the underlying holdings. The main drawback is that as an investor, you do not have direct ownership of the assets, or as it is often said with cryptocurrencies, “you do not own the keys or the coins.” Other disadvantages include higher costs associated with holding crypto assets, as ETFs charge fees for active management. Finally, while investing in ETFs reduces the risk of holding assets, price fluctuations in the underlying cryptocurrencies can also be reflected in the investment vehicle.
