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Bitcoin and the 2024 Election: What Trump’s Embrace of Cryptocurrency Means for the Market

Mike Cianciabella | October 14, 2024

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Bitcoin Bulls Are All-In for Trump: Examining the Crypto Landscape Ahead of the 2024 Election

As the 2024 presidential election looms closer, the cryptocurrency sector finds itself in a peculiar state of anticipation—some optimistically championing former President Donald Trump, while others maintain confidence in a potential win by Vice President Kamala Harris. With less than a month to go until Americans vote, the implications for Bitcoin and the broader crypto market are top of mind for many investors.

Trump: A Shift in Stance

This year has seen Trump make a remarkable turnaround regarding cryptocurrency, particularly Bitcoin. Previously dismissive of the industry, he has taken significant steps to align himself with crypto enthusiasts. In late July, Trump proposed the establishment of a Bitcoin strategic reserve and vocally promised to dismiss Securities and Exchange Commission (SEC) Chairman Gary Gensler, who has garnered a reputation as a stringent regulator of digital assets. These moves seem aimed at winning over younger, blockchain-friendly voters, who have become increasingly influential.

Market Stability Despite Election Turmoil

However, despite these developments, the cryptocurrency market appears surprisingly dormant as the election approaches. Bitcoin, which is often characterized by its volatility, has remained stable, floating between $55,000 and $65,000 for approximately three months, marking a modest increase of about 6%. Interestingly, Bitcoin prices did initially spike following an incident where Trump was shot at a rally in Butler, Pennsylvania, on July 13, due to speculations that his chances of winning may have increased. Yet, that momentum has fizzled since President Biden exited the race later that month, yielding the stage to Harris.

A 50/50 Landscape

Brett Reeves, a salesman for the crypto platform BitGo, noted that Harris’s rise has created a more balanced 50/50 landscape within the crypto market. This sentiment is echoed by polling analysis from the site 538, which indicates a 55% probability of a Harris victory contrasted with a 45% probability for Trump. Analysts suggest that Bitcoin may continue to trade relatively flat until the uncertainty surrounding the election resolves, leaving investors to ponder what may transpire after November 5.

Post-Election Outlook

Gregory Benhaim, a portfolio manager at the digital asset management firm 3iQ, stated that a Trump win would likely result in a short-term surge in Bitcoin prices. However, he cautioned that without a Republican majority in Congress, Trump might face challenges in pushing through crypto-friendly policies. Conversely, a Harris victory may present a “bumpier ride” for cryptocurrencies. Despite her acknowledgment of crypto as one of the “industries of the future” within her economic strategy, some industry players believe her support has come too late to win over the crypto community.

The Long-Term View

Interestingly, some traders in the crypto space are not as concerned about the immediate ramifications of the election. Benhaim, a self-proclaimed “Bitcoin maximalist,” expressed confidence that regardless of who wins, the appeal of Bitcoin will remain intact as both parties continue to struggle with the growing U.S. debt. He opined, “I’m really not looking at this election as a make-or-break moment for Bitcoin or digital assets as a whole. In the short term, one outcome might be more painful than the other — but over the long term, I’ve never really been more confident.”

Resilience Amid Deficits

Benhaim further emphasized that neither the Republicans nor Democrats are likely to curtail spending, which will ultimately benefit Bitcoin. He noted that the ability of crypto investors to “hold on for dear life” has been pivotal in Bitcoin’s remarkable journey over the last 15 years. Should Trump lose the upcoming election, investors are expected to point to the escalating deficit as another reason to remain bullish on Bitcoin’s long-term performance.

Conclusion

As the 2024 presidential election approaches, Bitcoin enthusiasts find themselves navigating a complex landscape defined by shifting political allegiances and market stability. Trump’s newfound affinity for the crypto space, coupled with Harris’s cautious embrace, sets the stage for a potentially seismic shift in the digital asset market. However, regardless of the election outcome, many industry experts express unwavering confidence in the long-term value of Bitcoin, ensuring that the narrative around cryptocurrency will continue to evolve.