If Harris wins, the following effects could occur on the crypto market:
1. Regulatory aspects:
• Expectations for stricter regulation: Harris’s stance is likely to continue the Biden administration’s cautious approach to cryptocurrencies, and the crypto industry will face stricter regulatory scrutiny. This may include tighter regulation of cryptocurrency trading platforms, wallet service providers, etc., requiring higher compliance standards. For example, regulatory requirements for customer identity verification, anti-money laundering, and anti-terrorist financing may be strengthened to protect the interests of consumers and investors. This may pose survival challenges to some small or non-compliant cryptocurrency-related businesses, and will also increase operating costs for the entire industry.
• Tax policy adjustment: Harris may have new measures on tax policy, and the tax on cryptocurrencies may also be adjusted. For example, the tax on cryptocurrency transactions may be increased, or the specific requirements for asset declaration and taxation of cryptocurrencies may be clarified, which will affect investors' holding and trading decisions on cryptocurrencies.
2. Market confidence:
• Uncertainty brings volatility: The coming to power of new leaders and the policy changes they may bring will bring uncertainty to the crypto market. Investors may be cautious in the short term, leading to increased volatility in cryptocurrency prices. Some investors may choose to wait and see, reduce their investment in cryptocurrencies, or transfer funds to other relatively stable asset classes, such as gold, bonds, etc.
• Challenges in long-term development: If measures such as strengthened regulation and tax policy adjustments are implemented, in the long run, the innovation and development speed of the crypto market may be suppressed. Some innovative crypto projects may not be able to proceed smoothly because they are difficult to meet strict regulatory requirements, which may hinder the long-term development of the crypto market.
3. Industry development:
• Integration with traditional finance may slow down: Harris may be more inclined to maintain the stability and dominance of the traditional financial system, and may be relatively conservative about the integration of cryptocurrencies and traditional finance. This may affect the application and development of cryptocurrencies in payment, settlement, cross-border transactions and other fields, and slow down the integration between the crypto industry and traditional finance.
• Support for blockchain technology may be divided: Although Harris expressed encouragement for innovative technologies such as digital assets, she may focus more on applying blockchain technology to other fields, such as supply chain management, government services, etc., rather than simply promoting the development of cryptocurrencies. This may lead to a differentiation in the development of blockchain technology in different application fields. Cryptocurrency-related blockchain applications may be subject to certain restrictions, while blockchain applications in other non-cryptocurrency fields may receive more support and development.