The US presidential election is expected to have a substantial impact on global markets, with the cryptocurrency sector being no exception. Traders, analysts and crypto enthusiasts around the world are closely watching the United States, where changing attitudes towards digital assets are making a difference.
In a recent report, on-chain analytics platform Santiment explored the connection between the most important US political event and crypto market movements. With results expected in just a few days, here’s a look back at the crypto market’s reactions over the past two US presidential election cycles.
How the US Elections Impacted Crypto in Past Cycles
Analysts expect a close race in the 2024 US presidential election and predict a prolonged counting period. Given the close competition, several days could pass after Election Day on November 5 before final results are confirmed and the next president is publicly announced.
In previous elections, markets reacted quickly to presidential results. Officials announced Joe Biden’s 2020 victory four days after Election Day, sparking positive trends despite ongoing global economic turmoil due to COVID-19.
Although the election influenced market movements, some say a rally was already on the horizon as the international community focused on economic recovery and pandemic response.
Following Donald Trump’s victory in 2016, the crypto market experienced a slight five-day pullback, with Bitcoin and altcoins diving before quickly rebounding from the initial volatility. Cryptocurrency markets are notoriously volatile, and election cycles tend to amplify this effect.
In 2020, Joe Biden’s victory fueled optimism about stimulus policies and potentially more lenient monetary practices, leading to a surge in cryptocurrency prices. The brief decline and rapid recovery of 2016, contrasting with the post-election recovery of 2020, highlight how political changes can have a significant impact on market trends.
As a result, the news of Joe Biden’s victory in the 2020 election was much more positive for crypto, and markets reacted almost instantly after the news broke.
Read more: How can blockchain be used for voting in 2024?
The 2024 elections are expected to cause significant price swings in crypto markets, due to the new administration’s stance on regulation and policy. Both leading presidential candidates outlined their views on cryptocurrency, offering insight into the potential direction of U.S. digital asset policy in the years to come.
Candidate Positions on Cryptocurrency: Trump vs. Harris
Donald Trump
Cryptocurrency enthusiasts largely view Trump’s proposals as more favorable due to his emphasis on industry-friendly policies and his family’s active involvement in digital assets. The crypto community has largely responded positively to his proposals, which many consider encouraging for market growth:
- National Bitcoin Reserve: Trump proposed creating a national Bitcoin stockpile at the Bitcoin 2024 conference in July, aiming to make the United States a leader in cryptocurrency.
- Crypto-friendly regulatory policies: Trump pledged to create a presidential advisory council on cryptocurrencies, aimed at developing clear and favorable regulations.
- SEC Management Review: Trump said he would replace SEC Chairman Gary Gensler, aiming for a regulatory change he describes as more favorable to digital assets.
- Family businesses in crypto: Trump’s sons, Donald Trump Jr. and Eric Trump, recently launched World Liberty Financial, a cryptocurrency exchange, highlighting the family’s involvement in the industry.
Kamala Harris
Harris, while supportive, emphasizes consumer protection, which some in the crypto world interpret as less conducive to industry expansion:
- Supporting Innovation in Digital Assets: Harris expressed support for digital assets and AI, emphasizing the need to foster innovation while protecting consumers.
- Regulatory clarity framework: Harris proposed a regulatory framework for digital assets in October 2024, focused on investor protection and transparent guidelines.
- The potential of blockchain: Harris recognized the potential of blockchain technology, calling for balanced regulations that support innovation without compromising consumer security.
- Engagement with industry leaders: Harris has engaged in dialogue with cryptocurrency leaders throughout 2024, signaling openness to digital innovations while maintaining regulatory standards.
These different approaches resulted in a much higher volume of mentions around Trump’s crypto discussions and policies compared to those of Harris, reflecting the community’s increased interest in her approach.
On Polymarket, prediction rates show higher support for Trump than Harris within the crypto community, although Harris has recently closed the gap, making it a closer race.
Read more: How to Use Polymarket in the US: Step-by-Step Guide
Regardless of who wins the 2024 election, the cryptocurrency industry expects continued growth and evolving regulatory frameworks as the new administration takes office. The cryptocurrency community will be closely watching how the new administration manages the rise of digital assets, balancing innovation momentum with regulatory safeguards. .
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