Today is November 5th, and the "election night" of the US presidential election is approaching. The two candidates have completely different policy positions, which not only affects the future of the US economy, but will also have a profound impact on the crypto market.
If Trump is elected, does it mean a bullish outlook for the cryptocurrency world?
If Harris is elected, does it mean a bearish outlook for the cryptocurrency world?
Is this really the case?
This article will provide you with a reference by deeply analyzing the potential impact of the two candidates’ policy proposals on the market.
Current situation of the election and key time points
The 2024 US election has been full of drama and volatility. Looking back over the past few months:
July 2024: Trump unexpectedly survives an assassination attempt, and his approval rating rises rapidly, and he is regarded as the "chosen one." Biden announces his withdrawal from the race, and Vice President Harris takes over.
August-September 2024: During the "newbie protection period" in August and September, Harris's approval rating once surpassed Trump.
October 2024: After the novice protection period ends, Harris performs poorly in media interviews, and her policy advocacy gradually lags behind Trump, leading to a decline in poll support.
Currently, the latest polls show that Trump is leading in several key swing states, but the complexity of the Electoral College system makes the final result still unpredictable.
Below is the election timeline, with the results to be announced tomorrow, November 6, we’re about to reveal where the crypto markets are headed in the coming months.
Policy differences between Trump and Harris
According to analysis, the two candidates' policy proposals have different impacts on the cryptocurrency field.
First of all, the conclusion that everyone is most concerned about is: Who is more beneficial to the crypto market?
Trump's coming to power: good for the crypto market. Trump's policies tend to reduce taxes, relax regulations and promote capital inflows, which may activate the crypto market, especially in terms of market sentiment and speculative trading.
Harris's coming to power: It may have a negative impact on the crypto market in the short term, but it is positive in the long run. Harris's policies tend to strengthen supervision and increase taxes, which may cause pressure in the short term. However, in the long run, Harris advocates focusing on social welfare spending, and the stability and growth of the overall economy may provide indirect support to the crypto market.
Trump's favorable policy proposals for cryptocurrencies:
Taxation: Supporting tax cuts can stimulate investment and consumption, increase market liquidity, and thus stimulate demand for high-risk assets such as cryptocurrencies.
Finance: In terms of fiscal spending, it tends to reduce government intervention and encourage market freedom, which may attract more capital to flow into the market.
Trade: Higher tariffs could lead to higher inflation, causing investors to turn to cryptocurrencies as a hedge, but this could also raise the risk of higher interest rates due to expected inflation.
Cryptocurrency policy: The US supports cryptocurrencies, believes that they are an important part of the future financial system, and is not in a hurry to implement strict regulation.
Harris's favorable policy proposals for cryptocurrencies:
Finance: Pay more attention to social welfare spending, such as child subsidies and assistance for low-income families, reflecting the Democratic Party's preference for a big government. This may stimulate consumption and demand in the US economy and enhance overall economic vitality. Although the crypto market may face stricter regulation, the stability and growth of the overall economy may also have a positive impact on the crypto market.
Next, let’s conduct an in-depth analysis from the perspective of taxation:
Trump: Advocate tax cuts, such as reducing corporate income tax from 21% to 15%, considering replacing income tax with tariffs, and imposing a base tariff on US imports, especially a 60% tariff on products from China. These radical tax cuts are intended to stimulate investment and consumption, increase market liquidity, and thus stimulate demand for high-risk assets such as cryptocurrencies.
Harris: He advocates raising taxes, especially for large companies and high-income earners, raising corporate taxes to 28% and raising taxes on people with annual incomes over $400,000. This policy is intended to increase government revenue to support social welfare spending, but it may also undermine investor confidence and reduce capital inflows.
Comparative analysis of the impact on the encryption market:Trump's tax cuts may attract more capital to flow into the United States, activate market sentiment, and indirectly promote the growth of the crypto market. Harris's tax increase measures may suppress market vitality, especially reducing the attractiveness of investors to high-risk assets such as cryptocurrencies.
Impact on BTC price and crypto market
Impact on Bitcoin price:
According to Bernstein and other analysts, if Trump is elected, the price of Bitcoin could rise sharply, reaching $80,000 to $90,000 by the end of the year. Standard Chartered Bank's analysis team even predicted that the price of Bitcoin could soar to $125,000.
On the contrary, if Harris is elected, it may cause the price of Bitcoin to fall below $50,000, and some analysts even believe that it may fall to around $30,000.
Overall, the market's rise in support for Trump is highly correlated with the upward trend in Bitcoin prices, while Harris' victory could trigger a short-term price correction.
The reason for all this is that the policy differences between the two candidates will directly affect the psychological expectations and future development direction of the crypto market.
Short-term impact:
Trump is elected: Volatility in the crypto market is expected to increase significantly, especially amid rising policy uncertainty, with speculative trading likely to dominate the market. Trump's tax cuts and loose regulations will attract a large influx of capital, which may bring a wave of short-term funds to the encryption market, which will benefit altcoins such as Bitcoin (BTC) and DOGE.
Harris's election: In the short term, the crypto market may face stricter regulatory measures, and market development may be suppressed. Investor sentiment may become more conservative, and the liquidity and trading volume of crypto assets may decline. However, there is also a view that the market's concerns about Harris's possible "bottleneck" crackdown on utility tokens may trigger a huge wave of Memecoins. The reason is that Memecoins are not utility tokens and are therefore not regulated by the SEC.
Long-term effects:
Trump's election: In the long run, Trump's policies may promote the development of the crypto market, especially the application of Bitcoin and blockchain technology will gain more support. Tax cuts, increased tariffs and relaxed regulations may attract more funds to flow into the crypto market and enhance the status of cryptocurrencies as safe-haven assets.
Harris was elected: In the long run, with the improvement of economic stability and regulatory framework, a more robust and regulated capital market will have a positive impact on the crypto industry.
Summarize
Whether Trump or Harris is elected, it will have a profound impact on the development of the crypto market. Trump's policies tend to promote market activity and capital flows, while Harris focuses on strengthening supervision and increasing taxes. At present, we still need to pay close attention to the election results so as to adjust our investment strategies according to the policy direction.
The crypto market will obviously be an important focus of observation in this political competition.
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