How the 2024 U.S. Presidential Election Could Shape Bitcoin’s Future: Trump vs Harris

The 2024 U.S. presidential election is set to have significant implications for the crypto market, especially for Bitcoin, as candidates Donald Trump and Kamala Harris present contrasting visions for the future of digital assets. In this article we will explore how their respective policies and regulatory approaches could shape Bitcoin's trajectory for the four years.

Bitcoin’s price has fluctuated considerably in the lead up to this election, this is due to changing regulatory policies and macroeconomic conditions. As of early November 2024, Bitcoin was trading around $106,000 AUD, following a high of approximately $110,000 AUD in late October.

Trump vs Kamala Harris on Bitcoin

Bitcoin and the Impact of U.S. Policy on Global Markets

Why U.S. Policy Matters Globally

The United States plays a crucial role in setting regulatory standards for cryptocurrencies worldwide. Decisions made by U.S. regulators have a history of influencing international practices, building market confidence, and defining operational standards for cryptocurrency businesses globally. As such, the upcoming presidential election is critical; the elected administration will likely shape international norms and the global regulatory landscape.

Bitcoin’s Standing Leading Up to the 2024 Election

In recent months, Bitcoin has faced significant developments:

Political Uncertainty: Speculation regarding election outcomes has contributed to increased Bitcoin price volatility.

Price Trends: Bitcoin's price has fluctuated considerably, impacted by changing regulatory policies and macroeconomic conditions. As of early November 2024, Bitcoin was trading around $106,000 AUD after reaching highs of approximately $110,000 AUD

Historical Patterns: Previous U.S. election cycles have shown that Bitcoin’s price tends to react strongly to political events, highlighting the importance of this election.

Donald Trump’s Stance on Bitcoin and Cryptocurrency

Historical Statements and Actions

Donald Trump’s initial view on Bitcoin was clear; in 2019, he expressed scepticism about its use in illegal activities. However, his stance has changed from initial scepticism to publicly endorsing Bitcoin as he seeks to attract crypto supporters in the polls:

Pro-Crypto Position: At the Bitcoin 2024 conference, Trump stated his desire for the U.S. to become the "crypto capital of the planet" and a "Bitcoin superpower."

Regulatory Critique: Trump has criticised current SEC Chair Gary Gensler for what he views as overreach that stifles innovation.

Potential Policy Directions

While Trump has not yet unveiled a comprehensive crypto policy for the 2024 election, his track record suggests a deregulatory approach:

Deregulation: He is likely to support fewer restrictions in the crypto sector, promoting innovation while balancing national security concerns related to illicit uses of cryptocurrency.

Bitcoin Reserve Proposal: Trump has proposed creating a national Bitcoin reserve to position the U.S. as a leader in cryptocurrency.

Implications for Bitcoin’s Future

Market Optimism: A deregulatory approach could drive investor confidence and promote market growth.

Regulatory Uncertainty: The absence of clear policies might fuel market volatility as investors anticipate potential shifts.

Increased Adoption and Innovation: Reduced regulatory barriers could accelerate Bitcoin adoption and technological innovation.

Kamala Harris’s Perspective on Bitcoin and Digital Assets

Public Statements and Legislative Actions

Kamala Harris has engaged cautiously with cryptocurrency but recently expressed a growing interest in addressing digital assets:

Consumer Protection Focus: Kamala emphasises robust regulatory oversight to ensure consumer protection while promoting innovation.

Engagement with Industry Leaders: Her campaign has reached out to crypto industry leaders to understand their needs better.

Potential Policy Initiatives

If elected, Kamala is likely to champion comprehensive regulations aimed at ensuring market stability:

Structured Regulatory Oversight: Kamala would probably prioritise establishing clear industry guidelines to enhance consumer confidence in digital assets.

Financial Inclusion Emphasis: Her policies may focus on using cryptocurrencies to bridge wealth gaps among marginalised communities.

Implications for Bitcoin’s Future

Immediate Market Reaction: Analysts suggest a Kamala win could initially dip Bitcoin's price due to concerns over stricter regulations but may rebound as regulatory clarity is introduced.

Investor Confidence: Stronger regulatory frameworks could improve long-term investor confidence and encourage institutional adoption of Bitcoin.

Inflation Hedge Potential: In times of economic instability, Bitcoin may benefit as a store of value if robust policies support its role as an inflation hedge.

External Factors Shaping the Future of Bitcoin

Global Cryptocurrency Trends

U.S. policy on cryptocurrency has significant global implications:

A favourable U.S. stance could encourage other nations to adopt similar frameworks, boosting global adoption of Bitcoin.

Conversely, stringent regulations could inspire similar frameworks internationally, affecting acceptance in various regions.

Economic Policies and Indirect Impacts

Inflation and Monetary Policy: The economic strategies pursued by each administration could enhance Bitcoin’s role as an inflation hedge.

Tax Policies: Different approaches to digital asset taxation may affect investor behaviour, potentially impacting Bitcoin’s market growth and trading volumes.

Conclusion

As the U.S. gears up for the 2024 election, the futures of Bitcoin and cryptocurrency regulation hang in the balance. Whether Trump or Kamala takes office, their policy decisions will shape the regulatory landscape, influence market sentiment, and determine the pace of Bitcoin’s adoption and growth. For investors and crypto businesses, staying informed and adaptable will be crucial strategies for navigating the opportunities and challenges that lie ahead in this pivotal moment for digital assets.

In summary, with both candidates actively courting crypto voters—Trump with his pro-Bitcoin agenda and Kamala with her focus on consumer protection—the outcome of this election could redefine how cryptocurrencies are regulated in the U.S., impacting not only domestic markets but also setting precedents that resonate globally.