The United States is balancing the weak dollar with an asset that has the potential to solve many of the financial problems facing the middle class.
Bitcoin first emerged more than three election cycles ago. However, the 2024 U.S. presidential election is the first time Bitcoin (and cryptocurrencies more broadly) has come close to being considered a key election issue. Fierce advocates of the ideals laid out in Satoshi Nakamoto's white paper have become an influential subset of single-issue voters, despite recent years being rocked by bear markets and broader industry turmoil such as that of once-lauded cryptocurrency exchange FTX closure), they remain committed to the cause. Things have changed for the industry and its supporters recently, with Bitcoin prices holding steady and institutions like BlackRock, the world's largest asset manager, claiming Bitcoin is this generation's store of value. As the election heats up, the question now is: What role will this modern form of money play in the future of the world's most powerful economy? The Federal Reserve says the dollar will have just 3% of its original purchasing power by 2024, leading many developing economies to consider trading in currencies other than the dollar. There are also concerns that current monetary policies, designed to avoid a recession, may actually lead to dollar hyperinflation and economic recession. In recent years, the economy has oscillated between explosive growth catalyzed by easy monetary policy and economic collapse exacerbated by a looming debt crisis. Escalating geopolitical tensions and conflicts over the past few years have further exacerbated this volatility. This chaos has led to a widening gap between rich and poor, with the wealth of the upper class doubling while the wealth of the middle class continues to decrease. Since its emergence, Bitcoin has been viewed by many as a potential hedge for the middle class against economic fluctuations. It is expected to be an inflation-proof asset that can bring financial independence to the declining middle class, but the dollar remains the backbone of the global economy. Although the purchasing power of the U.S. dollar continues to decline, it still retains the trust of many retail investors.
Today, the United States finds itself facing an unprecedented dilemma: between a declining dollar and assets that have the potential to solve many of the glaring financial problems facing the struggling middle class. How the latter is discussed and resolved will have the biggest impact on where the world’s most important economy is going 25 years from now.
Against this backdrop, here are four bold predictions about how this year’s election will impact the future of Bitcoin and digital assets in the United States.
1. No matter who wins, Gary Gensler is probably out
Since taking over as SEC Chairman Gary Gensler, he has made virtually no friends in the crypto community. While he has had some notable victories, his approach to law enforcement regulation has also failed in court. Former President Donald Trump had promised to “fire” Gensler if he was elected, but that never actually happened. Traditionally, the SEC chairman resigns if the White House changes during the term. If we see a victory for Vice President Kamala Hillary, it is not surprising that her administration has taken a similar stance to its opponents in an attempt to win over the industry. Change is at hand.
2. He Jinli’s victory may benefit Bitcoin, while Trump’s victory may benefit Ethereum
Bitcoin largely acts as a commodity, with inflows flowing in when U.S. interest rates lower and capital becomes cheaper. Given that the Harris administration is likely to continue with current monetary policy and increase government spending, the cryptocurrency market should remain stable and may even climb higher. Instead, a Trump victory would mean incentives for cryptocurrency companies to incubate in the United States — something the country has been lacking. It can be said that under the leadership of the Trump administration, a clearer regulatory framework will emerge, thus bringing more opportunities to the decentralized finance (DeFi) industry. Given that the DeFi ecosystem is primarily built on Ethereum, a Trump administration could benefit it and other layer-1 protocols.
3. The Harris government may introduce a cryptocurrency capital gains tax
While an election victory would allow Harris to set her own policy agenda, she served for three and a half years in an administration that had considered imposing a capital gains tax on cryptocurrencies. Given the amount of capital that's about to flow into the asset class, it's hard to imagine that the U.S. government won't try to get a piece of the action as cryptocurrencies become increasingly integrated into traditional finance. Increased taxes appear less likely under the Trump administration, given the desire to “focus” on cryptocurrency diehards is strongly expressed in the administration’s platform.
4. Trump will release a formal plan on Bitcoin and digital assets before the election
While Harris has been largely silent on digital assets on the campaign trail — mentioning other emerging technologies only in passing — Trump has been formally seeking “cryptocurrency votes.” The former president became the first and only president to attend the Bitcoin Nashville 2024 event this summer, where he famously stated that the future of Bitcoin would be in the United States and that he would “let Elizabeth Warren and her thugs stay away from your Bitcoin." He also launched his own DeFi project, World Liberty Financial. If formal policy recommendations on cryptocurrencies and digital assets are to come out before the election, it will likely come from the Trump campaign.
Change almost always takes longer than expected and happens differently than planned. Bitcoin is no exception. The mission and message behind Bitcoin may be the most powerful signal of liberating power in centuries. However, if the core principles of Bitcoin and cryptocurrencies are realized, the institutions with the most power will stand to lose the most.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: (MarsBit)
Original author: SOLO CEESAY
