Original author: Biteye core contributor Viee
Original editor: Biteye core contributor Crush
Today, November 5th, will be the election night of the US presidential election. The two candidates have completely different policy propositions, which not only affects the future of the US economy, but will also have a profound impact on the direction of the crypto market.
With Trump in office, are you bullish on the cryptocurrency market?
If Harris comes to power, will he be bearish on the cryptocurrency market?
Is it really so?
In this article, Biteye analyzes the impact of the two policy propositions on the market and provides a reference for everyone.
1. Current situation of the election and key time points
The 2024 US election is full of drama and volatility. Let’s review:
July 2024: Trump survives an unexpected assassination attempt, and his public support rises sharply, making him the chosen one. Biden announces his withdrawal from the race, and Vice President Harris takes over.
August-September 2024: During the newbie protection period in August and September, Harriss approval rating briefly surpassed Trumps.
October 2024: After the novice protection period ends, Harris performs poorly in many media interviews and gradually lags behind Trump in policy advocacy, causing her poll ratings to decline.
Currently: According to the latest polls, Trump has taken the lead in several key swing states, but the complexity of the Electoral College system means the final result is still unpredictable.
Below is a timeline of the election, with the results to be announced tomorrow, November 6, giving us a glimpse into where the crypto market is headed in the coming months.
Source: 270 towin, Minsheng Securities Research Institute
2. Policy Differences between Trump and Harris
According to analysis, the two candidates’ policy proposals have different impacts on the cryptocurrency field.
Let’s first talk about the conclusion that everyone is most concerned about: Who is beneficial to the crypto market?
Trumps coming to power: good for the crypto market. Trumps policies tend to reduce taxes, relax regulations, and promote capital inflows, which may drive the activity of the crypto market, especially in terms of market sentiment and speculative trading.
Harriss coming to power: short-term potential negative for the crypto market, but long-term positive. Harriss policies tend to strengthen regulation and increase taxes, and in the short term, increased regulation may bring pressure. However, in the long run, Harris advocates focusing on social welfare spending, and overall economic stability and growth may provide indirect support for the crypto market.
Trump’s pro-crypto policy proposals:
Taxation: Supporting tax cuts can stimulate investment and consumption, increase market liquidity, and stimulate demand for high-risk assets such as cryptocurrencies.
Finance: In terms of fiscal spending, it tends to reduce government intervention, encourage market freedom, and may drive more capital into the market.
Trade: Raising tariffs could lead to higher inflation, causing investors to turn to cryptocurrencies as a hedge. But there is also the possibility of a consequence of higher interest rates due to expected inflation.
Cryptocurrency policy: The government supports cryptocurrencies, believes that cryptocurrencies are part of the future financial system, and is not in a hurry to impose strict regulations.
Harris’s pro-crypto policy proposals:
Finance: Paying more attention to social welfare spending, such as child subsidies and relief for low-income families, reflects the Democratic Partys preference for a big government. This may stimulate consumption and demand in the US economy and enhance overall economic vitality. Although the crypto market may face stricter regulation, the stability and growth of the overall economy will also have a positive impact on the crypto market.
Next, we will select the tax angle and start the analysis:
Trump: Supports tax cuts, such as reducing corporate income tax from 21% to 15%, considering replacing income tax with tariffs, and imposing a base tariff on US imports, especially a 60% tariff on products from China. Such radical tax cuts are intended to stimulate investment and consumption, increase market liquidity, and stimulate demand for high-risk assets such as cryptocurrencies.
Harris: He advocates raising taxes, especially on large companies and high-income earners, raising corporate taxes to 28% and raising taxes on people with annual incomes over $400,000. This policy is intended to increase government revenue for social welfare spending. But it may also undermine investor confidence and reduce capital inflows.
Comparison of impact on the crypto market: Trumps tax cuts are likely to attract more capital into the United States, activate market sentiment, and indirectly promote the growth of the crypto market. Harriss tax increase measures may reduce market vitality, especially for investors in high-risk assets (such as cryptocurrencies), making them less attractive.
3. Impact on BTC Price and Crypto Market
Impact on Bitcoin price:
According to Bernstein and other analysts, if Trump is elected, the price of Bitcoin could rise sharply, reaching $80,000 to $90,000 by the end of the year. The analysis team of Standard Chartered Bank even gave a forecast of $125,000.
However, if Harris is elected, it could cause the price of Bitcoin to fall below $50,000, with some predicting it could fall to around $30,000.
Overall, the markets rising support for Trump is highly correlated with the upward trend in Bitcoin prices, while Harris victory may trigger a short-term price correction.
The reason is that the policy differences between the two candidates will directly affect the psychological expectations of the crypto market and its future development direction.
Short-term impact:
Trumps election: The volatility of the crypto market is expected to increase, especially when policy uncertainty increases, and speculative trading may become dominant. Trumps tax cuts and loose regulations will attract a large amount of capital inflows, and the crypto market may usher in a short-term wave of funds, which is good for BTC and altcoins such as DOGE.
Harris is elected: In the short term, the crypto market may face stricter regulatory measures, and market development may be suppressed. Investor sentiment may become conservative, and the liquidity and trading volume of crypto assets may decline. However, there are also different voices (@milesdeutscher) who believe that the markets concerns about Harriss bottleneck crackdown on utility tokens may trigger a huge Meme Season. The reason is that Memecoins are not utility tokens, so they are not regulated by the SEC.
Long-term effects:
Trumps election: In the long run, Trumps policies may promote the development of the crypto market, especially the application of Bitcoin and blockchain technology will gain more support. Tax cuts, increased tariffs and relaxed regulations may prompt more funds to enter the crypto market and enhance the status of cryptocurrencies as safe-haven assets.
Harris was elected: In the long run, with the improvement of economic stability and regulatory framework, a more robust and standardized capital market will have a positive impact on the crypto industry.
04. Conclusion
Whether Trump or Harris is elected, it will have a profound impact on the development of the crypto market. Trumps policies tend to promote market activity and capital flows, while Harris policies focus on strengthening supervision and increasing taxes. At present, we should still pay attention to the election results so as to adjust our investment strategies according to the policy direction.
In this political competition, the crypto market will undoubtedly become an important observation point.
