The 2024 United States presidential election is set to have an unprecedented effect on the cryptocurrency industry.
While many investors worry that a victory for Vice President Kamala Harris would dampen the market, some believe that her administration would bring a positive change for the industry.
With Harris’ link to current President Joe Biden’s administration — which is often viewed as anti-crypto — analysts at private wealth management firm Bernstein forecast that a Harris victory could drive Bitcoin’s (BTC) price down significantly by year-end.
However, pseudonymous crypto trader Crypto Rand believes that a Harris win won’t bring an end to the bull market.
The trader told Cointelegraph that Bitcoin (BTC) and altcoin markets are due for a bull run in Q4 2024 and Q1 2025, regardless of who ends up in the White House.
“If Harris gets elected, there will be a bump on the road, but the trend will continue,” he predicted. He foresees a temporary 5% to 10% dip in BTC’s price, viewing it as a short-term disruption rather than a trend reversal.
Youwei Yang, chief economist at Bit Mining, believes crypto investors should focus on monetary liquidity in the global economy.
“The more easing monetary policy becomes, the more likely ‘hot money’ will flow into risk assets like cryptocurrencies,” Yang told Cointelegraph. He believes that a Harris election win could enhance this liquidity.
Correlation between Bitcoin price and global liquidity. Source: Lyn Alden
Yang argued that if the Federal Reserve “adopts a more accommodating stance under a Harris administration, it could offset the regulatory challenges and support crypto prices, leading to only minor differences in the end result.”
Yang forecasts BTC at $120,000 under a Harris administration, while saying it could reach slightly higher under a renewed President Donald Trump, with a prediction of $135,000.
The consensus among observers suggests that a Harris victory may not necessarily spell disaster for the ongoing crypto bull trend, but some investors fear it could pose significant challenges for the US crypto industry.
Harris’s lack of clear crypto policy generates a “fear wave”
Venture capitalist Tim Draper told Cointelegraph that the elections are crucial and that whoever wins must avoid imposing regulations on an industry that “may define the global economy for the next three decades.”
Bitcoin millionaire and crypto entrepreneur Erik Finman told Cointelegraph that the Biden administration’s executive order on digital assets was “terrible for crypto.” He worries Harris could continue Biden’s anti-crypto stance.
Draper said that other countries are beginning to innovate and that businesses will move to wherever there is more regulatory clarity:
“Innovators are ‘geofencing’ the US until regulation is cleared up.”
Harris avoided mentioning cryptocurrency directly until relatively late in her campaign. On Sept. 22, she said her administration would encourage investment in artificial intelligence and digital assets as part of keeping American business competitive.
Despite Harris’ seemingly good intentions, Basel Ismail, CEO of crypto investment and analytics platform Blockcircle, told Cointelegraph that she could have “taken the opportunity to capitalize on it by sharing a detailed roadmap.”
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Crypto Rand believes that Harris’ “lack of clarity plants the seed for uncertainty” and that this “uncertainty can be worse than opposition because companies don’t know what to expect next, and they bleed slowly.”
“An election win from Harris will enable a fear wave among the US crypto industry.”
The US Securities and Exchange Commission’s “regulation by enforcement” approach under the Biden administration has made many in the crypto industry reassess whether they should leave the US.
Crypto Rand said that “four years is like 20 crypto years,” so a Harris election victory may trigger a migration to more crypto-friendly countries.
“Most crypto companies will exit the US and look for better alternatives like Singapore, the United Arab Emirates, El Salvador and maybe Argentina soon, too.”
Rashan Colbert, head of policy at US-based decentralized trading platform dYdX, told Cointelegraph that other nations are moving faster than the US, a “trend that either incoming administration should not want to persist” if they want to encourage the US crypto sector to stay competitive.
“The Henley Crypto Adoption Index 2024,” produced by investment migration consultancy firm Henley & Partners, ranked the state of crypto adoption in different countries and placed the US below the UAE, Hong Kong and Singapore.
Top 10 ranked countries in the Henley Crypto Adoption Index 2024. Source: Henley & Partners
Harris hasn’t confirmed a new SEC chair
There is common consensus among market observers that current SEC Chair Gary Gensler has been “the biggest burden to the crypto industry in the US,” said Crypto Rand.
“A change at the head of the securities supervisor would signal the end of an era of blatant overreach and harmful regulation by enforcement,” said Colbert.
While Trump promised to fire Gensler “on day one” of his presidency — something he legally can’t do — Harris hasn’t given any official position on Gensler’s future as head of the SEC. However, some close to her team have hinted that his position as chair is far from guaranteed.
According to billionaire investor Mark Cuban, Harris’ team opposes the SEC’s current tactic of “regulation by enforcement.” He told Cointelegraph:
“I think the obvious issue is Gensler, and my guess is that, based on the lack of public support for him, that he is gone.”
Cuban said Harris “views bright line regulations as a positive and is against regulation via litigation.” He believes her administration could clarify regulations so that “companies will no longer have to move offshore to develop applications.”
A new chair may be able to offer a proper set of guidelines for the crypto industry. Draper went one step further, calling for an update to US securities law. He said using the 80-year-old Howey rule to regulate a “dynamic, growing environment is short-sighted.”
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Still, most major crypto companies haven’t left the country. The US market may simply be too juicy to leave, despite regulators’ less-than-friendly approach over the last few years.
The US boasts the world’s largest gross domestic product at $29.17 trillion, followed by China’s $18.27 trillion, according to the International Monetary Fund.
The SEC is currently pursuing multiple cases against major crypto firms for unregistered securities. The upcoming election may not only usher in a new president but could also bring fresh SEC leadership, potentially changing the commission’s approach to the crypto sector.
