How the 2024 US Election Could Shape the Future of Crypto
The U.S. The House of Representatives has 435 races, the Senate has 33, and voters will, of course, decide who will be in the White House for the next four years. However, globally, all eyes are on who wins the 2024 US election, as it is a factor to shape the future of cryptocurrency.
The next US president will play a significant role in selecting regulators and possibly even promoting crypto regulations, enacting executive orders, or influencing legislation. According to AP News, Trump has held the lead from the beginning and now has 247 electoral votes compared to Harris's 214, which puts him at 270.
How a Donald Trump or Kamala Harris win could impact cryptocurrency?
In the lead-up to the U.S. election, Donald Trump made two promises to the cryptocurrency community: he would release Ross Ulbricht and fire Gary Gensler, the chairman of the U.S. Securities and Exchange Commission.
It began in May when Trump mentioned cryptocurrency policy in passing during a speech, promising to back the sector and commute Ross Ulbricht's sentence "on day one." Ulbricht is presently serving a life sentence without the possibility of parole for his involvement in the establishment and operation of Silk Road, a dark web marketplace that is closely linked to the early history of Bitcoin.
Trump reiterated the pledge during the July Bitcoin 2024 conference in Nashville, along with other promises. Among these was his promise that, if elected, he would immediately fire Gary Gensler. The majority of the crypto community members and investors were happy because the SEC's lawsuits against many of the most popular and legitimate cryptocurrency firms have disrupted public trust in the agency.
In addition, Trump has expressed support for cryptocurrency generally by stating that he prefers Bitcoin to be mined in the United States rather than China. Consequently, there is a widespread belief in the cryptocurrency community that a Trump win would be better for the industry, at least initially.
On the other hand, Democratic candidate and current Vice President of the United States in September, Harris made her first public remarks regarding cryptocurrency when she announced that the United States would invest in blockchain technology under her leadership.
Even though Harris' plans are less specific than Trump's, they would still benefit the cryptocurrency industry and at least demonstrate some support for it overall. However, it is still unclear how much the sector would gain under her leadership.
Increase in overall crypto market
The cryptocurrency market saw significant gains over the past day as more people predicted Trump would win. According to CoinMarketCap data, Bitcoin reached a new high of $75,085.30, breaking its previous peak.
Other altcoins like Ether and Solana also experienced significant growth, while Dogecoin—which is supported by Trump supporter Elon Musk—saw a 23.53% increase in the last day. The price of Ether increased by 7.44% to trade at $2,603.95, and Solana surged 16.27% to $187.16. These price increases were observed across major altcoins, resulting in an increase in the overall crypto market.
Bitcoin breaks new all-time high above $74,000
Bitcoin has historically done well in the months that follow presidential elections in the United States. According to the report, Bitcoin increased 37% in 2016, 98% in 2020, and 22% from Election Day to the end of the year following the 2012 election.
The price of Bitcoin has surpassed $73,737.94 to reach a new peak as the market adjusts to Republican candidate Donald Trump's early lead in the 2024 presidential race.
After reaching the $73,000 mark on March 13 and surpassing its all-time high of $69,000 from November 2021 on March 5, Bitcoin has continued its upward trajectory. Bitcoin has spent the better part of seven months rangebound between $50,000 and $70,000 since reaching that peak. According to the CoinMarketCap page, Bitcoin has increased 9.46% in the last day to trade at about $75,085.30 as of the time of writing.
The U.S. presidential election coincides with the new all-time high. In his campaign for a second term, former President Donald Trump has adopted a far more pro-crypto stance.
Bitcoin ETFs huge outflow
Due to significant inflows into the new spot Bitcoin ETFs in the US, the largest cryptocurrency by market capitalization has increased by almost 70% so far this year. As of October 28, the ETFs have produced a daily cumulative volume of over $450 billion since trading started on January 11.
As of October, inflows into Bitcoin ETFs have totaled $22.5 billion for the year, with over $3.6 billion coming in October alone. CoinShares Head of Research James Butterfill said last month that the current Bitcoin prices and flows are heavily influenced by U.S. politics.
Another factor contributing to this year's price increase was the April 20 Bitcoin halving event. The quantity of new Bitcoin coming into circulation through the miners' reward subsidy decreased from 6.25 BTC to 3.125 BTC per block as a result of the halving. With every block that is mined, the miners continue to earn additional transaction fees.
Analysts warning of market volatility
Although BitMEX doesn't serve the US market, its CEO Stephan Lutz noted that the country's elections most often cause market turbulence, and since cryptocurrency is a high-risk asset, it is likely to experience similar turbulence during that time.
The full effect on the market may not be felt for six months after the election due to the sensitivity of cryptocurrency to macroeconomic factors, and Lutz cautioned that there will likely be more volatility over the course of the following year.
Trump's chances of winning the election rise to 99% on Polymarket
It appears that the decentralized prediction market platform Polymarket predicts that Donald Trump, a Republican, will win the U.S. presidential election.
Trump had 99% odds of winning the election, compared to 2.9% for Democratic Party candidate Kamala Harris, according to the platform's now $3.5 billion volume wager on the winner. Even though the Republican candidate's chances of winning the election increased to 84.3% in the last day on the outcome placed on the decentralized prediction market platform Polymarket, the number soared as the United States began counting votes.
On November 6, the prediction platforms jumped to the top of the Apple App Store rankings. SensorTower, an app analysis platform, now ranks Polymarket second overall among free apps.
Conclusion
According to analysts, cryptocurrency will benefit from the outcome of the election. Bitwise CIO Matt Hougan said in October that no matter what happens in November, he is convinced that cryptocurrency wins.
Trump's victory is seen as more optimistic for the future of the industry, even though Harris had also made remarks in favor of blockchain and cryptocurrency. With the world’s eyes on the election, the outcome of the election will be of special interest to those in the cryptocurrency industry, as it could significantly affect prices generally and the direction of the industry's growth in the coming years.
That means that if you are reading this and have the opportunity to vote in the 2024 U.S. election but haven't done so yet, your vote could have a significant impact.
Disclaimer
This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.