The United States is currently at the forefront of critical factors that could influence financial markets. With the highly anticipated FOMC meeting in September and the upcoming elections in November, attention is focused on the United States. These events are significant, affecting not only traditional markets, but also crypto enthusiasts who are hoping for legislation that could ease regulations in the crypto space.
This year has been a watershed moment for cryptocurrencies. Bitcoin has reached new all-time highs, and the approval of Bitcoin and Ether spot exchange-traded funds (ETFs) in the United States represents a major step toward mainstream adoption. These achievements underscore the growing integration of digital currencies into the global economy, setting the stage for greater policy and regulatory scrutiny as the election approaches.
According to experts, the main effect of crypto ETFs has been the increased legitimacy they bring to the space. However, some users believe that their main impact is in terms of capital inflows into the market. Regardless, the upcoming US presidential elections will influence both perspectives. If pro-crypto candidates win, they could act as a significant market driver, with the choice of president shaping the overall market sentiment.
“Historical data going back to 1927 suggests that the ruling party loses 70% of the time when elections are held in a recession year. Additionally, the ruling party typically also loses when the economy slides into recession within 12 months of the election. The difference with this election is that the hot topic is not economic growth, which has been robust in recent quarters, but prices and inflation, which have been difficult to control and have impacted affordability and disposable income,” said Subho Moulik, Founder and CEO of Appreciate.
Impact on the cryptocurrency market
Avinash Shekhar, Co-Founder and CEO of Pi42, believes that the US elections are most likely to affect investor sentiment, crypto laws, and the rise of digital assets, making the US elections a significant event for the crypto market.
“It is important to understand that elections will be of paramount importance in shaping the future of digital assets, blockchain solutions and the overall context of the crypto sphere,” Shekhar said.
It’s already been a landmark year so far, with BTC hitting all-time highs and BTC and ETH ETFs being approved. These milestones are a clear indication of the growing user interest in the digital currency, while also setting the stage for regulators to take notice as the election approaches.
“As the US presidential election approaches, the crypto industry is closely monitoring the candidates’ differing positions on digital assets. Former President and current candidate Donald Trump’s proposal to adopt Bitcoin as a US strategic asset, as well as Senator Cynthia Lummis’ endorsement, underscore the growing importance of crypto in global economic strategies. Donald Trump has positioned himself as a strong advocate for cryptocurrencies, proposing to make Bitcoin a US strategic asset and aiming to transform the US into the “crypto capital of the world.” His aggressive stance on cryptocurrencies has already impacted market movements, signaling a potentially significant policy shift if he wins,” said Balaji Srihari – Head of Trading at CoinSwitch.
