- The upcoming presidential election raises questions about what comes next for Bitcoin.
- Trump's victory could boost cryptocurrency markets significantly.
- Harris’s unclear stance on crypto may not provide the same support for Bitcoin.
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Cryptocurrency investors are closely watching the upcoming White House election in November, particularly its potential impact on Bitcoin.
Many believe that a Donald Trump victory would favor crypto markets and possibly propel Bitcoin to new all-time highs.
But what would a Kamala Harris win mean for the crypto landscape? That’s a crucial question we’ll explore next.
Bitcoin ETFs and Institutional Interest
Currently, Bitcoin ETFs boast total assets of around $50 billion. In contrast, Ethereum ETFs, which launched last June, raised $1 billion on their first day but haven't kept pace with Bitcoin’s momentum.
Institutional investors drive much of the activity in cryptocurrency ETFs, making up half of the total volume.
According to SEC regulations, any investor managing over $100 million must disclose their holdings quarterly. This requirement gives us insights into major players' exposure to cryptocurrencies.
For instance, Goldman Sachs (NYSE:GS) holds a net exposure of about $420 million, while Morgan Stanley (NYSE:MS)'s stands at approximately $203 million.
As the Federal Reserve embarks on a new cycle of interest rate cuts, riskier assets like cryptocurrencies could become more appealing.
With conservative investments offering lower returns, investors seeking better capital growth may turn to riskier assets, including stocks, currencies, and, of course, cryptocurrencies.
The Stakes of the Presidential Election
Bitcoin investors' gaze is firmly fixed on the upcoming presidential election, and the outcomes of a Trump or Harris victory would carry different implications. A Trump win could favor cryptocurrencies, especially Bitcoin, for several reasons:
- At the Bitcoin 2024 conference in Nashville, Trump pledged to appoint pro-crypto regulators.
- He expressed plans to establish a national Bitcoin reserve, a concept that resonates well with Bitcoin supporters.
- For example, Jersey City’s pension fund is set to invest in Bitcoin, similar to initiatives already underway in Wisconsin.
- Trump launched the cryptocurrency firm World Liberty Financial, with his children as partners.
- He aims to appoint an industry-friendly SEC chairman and has promised favorable regulations for digital currencies.
- His party platform explicitly supports the self-custody of digital assets and legal protections for Bitcoin mining.
- Trump's criticism of the SEC has made him a prominent advocate for cryptocurrency. He famously stated, "The United States will be the capital of cryptos. If we don’t do it, China will."
Trump even shared his financial statement showing a portfolio exceeding one million dollars in cryptocurrencies. Recently, he visited Pubkey Bar, a Bitcoin-themed establishment in New York, where he treated followers to burgers and soft drinks, paying with Bitcoin.
The Uncertain Future Under Kamala Harris
While a Harris victory wouldn’t necessarily harm the crypto sector, it may not offer the same advantages as a Trump win. Kamala Harris has yet to make any public commitments regarding cryptocurrencies.
Although she has outlined support for artificial intelligence growth, her stance on crypto remains vague. The Democratic Party's recent white paper lacked any mention of cryptocurrencies, raising concerns among investors.
Some Democratic voices suggest that Harris would take a balanced approach to the industry and would not harm crypto companies or holders. However, such general statements lack the specificity that investors seek.
Wiley Nickel, a supporter of cryptocurrencies within the party, claims Harris would be more supportive of the sector than Joe Biden, but this is irrelevant since she is competing against Trump, not Biden.
Additionally, several crypto companies have reported receiving no responses to inquiries about Harris's policy positions on cryptocurrencies. Trump's robust campaign, which frequently highlights digital assets, contrasts sharply with Harris's silence on the topic.
This dynamic suggests that Bitcoin might perform better under a Republican administration. For instance, the Bernstein firm posits that a Trump win could propel Bitcoin to new highs this year, while a Harris victory might exert downward pressure on its price.
Long-Term Outlook for Bitcoin
In my view, while Bitcoin's volatility may spike around the election, its long-term trajectory should remain positive regardless of who wins the presidency.
Trump may publicly support cryptocurrencies more openly, but Harris's lack of vocal opposition suggests that Bitcoin's upward trend could persist no matter the outcome.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk is at the investor's own risk. We also do not provide any investment advisory services. We will never contact you to offer investment or advisory services.