As the 2024 U.S. election approaches, tensions in the capital markets have reached a critical point, and the cryptocurrency market is particularly on edge. This year, Trump, who has faced a life-and-death crisis, is campaigning vigorously, and his proclamation to 'make America the crypto capital' has ignited enthusiasm in the crypto circle. However, history repeatedly reminds us that subtle changes in policies often become the watershed for the market.
Looking back at Roosevelt's 'New Deal' after he took office in 1933, the economic rules in the U.S. were completely reshaped overnight, forcing many companies to adapt to new policy directions, and the market landscape was reorganized. This time, the cryptocurrency industry may be facing a similar fate. As Harris steadily advances in her campaign, her highly aligned policy stance with Biden suggests that the current government's anti-crypto regulations may continue to intensify. For a crypto market that advocates freedom and decentralization, this policy direction may be a true test of life and death.
So, if Harris is elected, what will the future of cryptocurrencies look like? What opportunities might emerge that cannot be ignored? We will delve into these questions.
According to data from the prediction site Polymarket, the probability of Trump winning is currently 62.5%, while Harris's chances stand at only 37.5%. Although the prediction market believes Trump's chances are higher, (Forbes) polling data from October 31 shows that Harris has a slight 1% lead over Trump nationwide, with 10% of voters possibly changing their stance before the election.
In the seven key swing states that will determine the election outcome, Harris's support rate is 49%, slightly ahead of Trump's 48%. Just a week ago, Trump was leading Harris in these states by 50% to 46%.
Therefore, although many crypto supporters favor Trump's election, Harris still has the potential to succeed.
Historically, there have been presidents who were not favored but ultimately made a comeback.
The U.S. has seen several candidates who were initially underestimated during the early stages of their campaigns ultimately succeed.
In 1948, Truman was one of them. Polls showed him trailing Republican candidate Thomas Dewey. Media and polling agencies even prematurely declared Dewey the winner, with some newspapers printing headlines saying 'Dewey Defeats Truman.' However, Truman conducted a series of intensive campaigning activities, directly addressing voters, emphasizing the Democratic Party's achievements in economic and social policies, and ultimately won the election. This election is considered a classic case of polling inaccuracies.
In 1992, Clinton was also not a popular candidate within the Democratic Party during his campaign; he faced a slump early in his campaign due to a series of negative reports and scandals, with many experts predicting he would struggle to last. However, due to his flexible campaign strategy and ability to communicate with the public, along with the economic difficulties at the time, he gradually gained support. He ultimately defeated then-President George H.W. Bush and third-party candidate Ross Perot in a three-way race.
In 2016, Trump himself also staged a dramatic turnaround, as he was seen as a 'hopeless' candidate in the Republican primary, and even during the final election against Hillary Clinton, he was severely underestimated by mainstream polls. Throughout the campaign, Trump garnered significant support from voters, particularly in swing states, through his strong populist style and appeal to America's middle and lower classes, ultimately winning the election.
Thus, it seems wise not to jump to conclusions before the actual voting results are revealed. Just as Bitcoin faced black swan events during its most aggressive rise, no one can foresee the final outcome of the election in advance.
Harris's election: Disaster or market adjustment? Market opinions are polarized.
First, we must acknowledge that if Harris is elected, there is a high probability that she will continue the policy tone of the Biden era. At this moment, cryptocurrency investors feel a bit like they are on a roller coaster.
Analysts from the well-known firm Bernstein have predicted that if Harris wins, Bitcoin's price may see a significant drop by the end of the year, potentially losing 10%.
On the other side, veteran trader Crypto Rand in the cryptocurrency space remains much calmer. He believes that regardless of who takes office in the White House, the overall direction of the crypto market will not change, and a bull market will eventually come; it’s just that the journey may be a bit bumpy.
Thus, there are two key points: first, Biden-style policies are unfriendly to cryptocurrencies; second, the market is speculating whether Harris will increase regulation, leading to greater uncertainty.
Crypto Rand stated that even so, Bitcoin may bottom out and rebound in 2025, leading the entire market into a new bull market. These predictions are not baseless, as the ups and downs of the crypto market, whether for Bitcoin or altcoins, have long become the norm. For some steadfast supporters, these are just short-term fluctuations and do not signify a reversal of the overall trend.
Continuation of regulatory policies: Gary Gensler's 'enforcement regulation' and Biden administration's regulatory path.
We need to deeply understand how the Biden administration treats cryptocurrencies to more accurately predict Harris's policy direction. Since Biden took office, the SEC, under the leadership of current chair Gary Gensler, has initiated an 'enforcement regulation' model, especially targeting the cryptocurrency industry with a hardline approach. The SEC has not only sued major exchanges like Binance and Coinbase but has also thoroughly investigated unregistered cryptocurrency securities. There is a widespread perception both inside and outside the market that Gensler's regulatory approach has a distinctly high-pressure characteristic, making him a 'guardian of order' in the crypto market, but his methods have also led to significant controversy, with some accusing him of being a 'disruptor' of the market.
The following are some regulatory bills and enforcement actions from the beginning of 2021 to the end of Biden's term in 2024, reviewed in chronological order.
2021
March: The Financial Crimes Enforcement Network (FinCEN) under the U.S. Treasury proposed strengthening anti-money laundering (AML) and 'Know Your Customer' (KYC) requirements for cryptocurrencies to curb their use in illegal activities.
August: The Commodity Futures Trading Commission (CFTC) filed a lawsuit against the cryptocurrency trading platform BitMEX, accusing it of failing to implement proper anti-money laundering and KYC measures. Ultimately, BitMEX agreed to pay a $100 million fine and reached a settlement with the CFTC.
2022
February: The SEC filed a lawsuit against the crypto lending platform BlockFi, accusing it of failing to register its yield account products as securities. Eventually, BlockFi agreed to pay a fine of $100 million.
March: President Biden signed an executive order regarding digital assets, requiring federal agencies to coordinate the establishment of a cryptocurrency regulatory framework aimed at protecting consumers, maintaining financial stability, combating illegal activities, and exploring the potential of a U.S. central bank digital currency (CBDC).
June: The U.S. Department of Justice established a national cryptocurrency enforcement team, which immediately intervened in multiple cases after its establishment, including tracing cryptocurrency assets from the 'Silk Road' illegal trading platform and assisting in tracking international illegal transfers of cryptocurrency assets.
September: The U.S. Treasury released three reports on digital assets, focusing on the risks of cryptocurrencies in illegal finance, consumer protection, and payment systems, further clarifying the government's regulatory stance on cryptocurrencies.
October: The SEC began investigating Yuga Labs' NFT project Bored Ape Yacht Club (BAYC), due to concerns that its tokens might involve the sale of unregistered securities.
December: Following the FTX bankruptcy incident, the CFTC, SEC, and Department of Justice jointly launched an investigation into FTX to determine whether there were abuses of customer funds, illegal misappropriations, and fraudulent activities.
2023
May: Members of both parties in the U.S. Congress proposed the 'Cryptocurrency Tax Fairness Act', suggesting the implementation of capital gains tax exemptions on small transactions to promote the everyday use of cryptocurrencies and ensure the industry is not suppressed by complex tax systems.
August: The SEC filed a lawsuit against major cryptocurrency exchanges Binance and Coinbase, accusing them of not being registered as securities exchanges, with some crypto assets being considered unregistered securities. This action by the SEC is seen as a comprehensive cleanup of the cryptocurrency market, especially imposing stricter compliance requirements on trading platforms that do not comply with securities laws.
September: The Biden administration indicated its intention to further scrutinize all cryptocurrencies using proof-of-stake (PoS) mechanisms, proposing to classify them as securities. The SEC began to strengthen regulation of PoS assets like Ethereum, stating that their voting rights structure is similar to traditional stocks and may need to comply with securities laws.
November: Binance agreed to pay $4.3 billion in fines to settle a years-long investigation by the U.S. government. Binance admitted to participating in alleged money laundering, unlicensed remittances, and violations of sanctions. Meanwhile, founder Changpeng Zhao (CZ) acknowledged the failure to maintain an effective anti-money laundering program and resigned as CEO.
2024
April: Changpeng Zhao was sentenced to four months in prison (now released) for violating U.S. anti-money laundering laws by a federal court in Seattle.
May: The U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act (FIT21), laying the legal foundation for the regulation of digital assets and further clarifying the regulatory responsibilities of the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC), especially in managing and supervising cryptocurrency assets and digital financial products. The FIT21 Act is seen as an important foundational step for federal-level digital asset regulation.
June: The U.S. Treasury released a final rule requiring all cryptocurrency platforms to report user transaction details to the IRS starting in 2026, aiming to tighten regulation on cryptocurrencies in the tax domain and reduce tax evasion.
These events and bills undoubtedly indicate that the Biden administration's overall attitude toward cryptocurrencies leans toward strong regulation. Under Gary Gensler's leadership, the SEC has adopted an 'enforcement regulation' approach, bringing the cryptocurrency industry under a stricter legal framework, requiring market participants to comply with compliance standards.
It is worth noting that Gary Gensler's future role is currently uncertain. Although Trump has promised to fire Gensler on 'day one' if elected, he cannot legally decide the fate of the SEC chair directly. Harris has yet to make a formal statement on the reappointment of Gensler, and market analysts generally believe that Gensler's 'enforcement regulation' strategy may encounter resistance.
Renowned cryptocurrency analyst Crypto Rand bluntly stated that Gensler's policies are 'the biggest burden on the U.S. cryptocurrency industry.'
Rashan Colbert, policy director of the U.S. decentralized trading platform dYdX, also pointed out that if the new government can replace the SEC chair, it would mark the end of overreach in enforcement and harmful regulation, potentially aiding the compliant development of the crypto market.
Billionaire investor Mark Cuban has also expressed doubts about Gensler's enforcement approach, believing that Harris's team tends to oppose the 'enforcement regulation' model and hopes to promote the development of the crypto market through clear regulatory frameworks.
Cuban pointed out that Harris 'prefers clear regulatory guidelines rather than relying on litigation,' which allows companies to develop applications without having to relocate overseas.
Other industry observers believe that even if Harris replaces Gensler, the enforcement intensity in the cryptocurrency market will not weaken. Venture capitalist Tim Draper further calls for a complete update of U.S. securities laws, pointing out that the current Howey Test was established 80 years ago and is no longer suitable for the 'dynamic, growing modern market environment.' The real turning point lies in whether more transparent and clear regulations can be enacted to reduce industry uncertainty. This has garnered high attention in the market, as a clear regulatory framework can help businesses and investors make more stable arrangements instead of feeling like they are walking a tightrope with every policy announcement.
Global liquidity and market opportunities: Will loose monetary policy become the driving force of a bull market?
Yang Youwei, chief economist at Bit Mining, pointed out that if Harris is elected, cryptocurrency investors should pay special attention to the liquidity of currency in the global economy.
Here’s the key point: Will the so-called 'hot money' flow back into the crypto market, becoming a catalyst for a new bull market? Yang Youwei's viewpoint is clear: the looser the monetary policy, the greater the likelihood of capital flowing into the crypto market. Considering the current global economic uncertainty and the generally loose policies adopted by central banks worldwide, the inflow of hot money may indeed bring more market opportunities.
The correlation between Bitcoin prices and global liquidity. Source: Lyn Alden
Supporting this view are cryptocurrency entrepreneurs like Erik Finman. He believes that if the Federal Reserve adopts a looser stance under Harris's leadership, even with regulatory challenges, increased market liquidity will still support prices. In other words, the further Harris walks down the path of 'loose money' policies, the greater the potential for a bull market in the crypto space.
However, the premise of all this is whether the U.S. can withstand greater inflationary pressures. It is foreseeable that if Harris tries to continue implementing loose policies, she will inevitably face considerable fiscal pressure and market resistance. In this case, businesses and investors must be wary of the volatility risks in the crypto market and cannot easily overlook the chain reactions brought about by monetary policies.
Lack of clear policies triggers panic: Will the U.S. crypto industry be 'geographically fenced'?
For many participants in the crypto market, one significant flaw of Harris is her ambiguous stance on cryptocurrencies. In September of this year, Harris publicly stated for the first time that her administration would encourage investment in artificial intelligence and digital assets to maintain U.S. competitiveness. However, it is evident that such a statement lacks details and fails to reassure the market. This ambiguity has raised concerns that she may continue Biden's hardline approach, thus increasing market uncertainty.
Venture capitalist Tim Draper pointedly noted that currently, 'fear' has begun to spread throughout the industry, especially among smaller crypto companies that are more sensitive to uncertainty. Rather than lingering in the unstable regulatory policies in the U.S., an increasing number of companies are choosing to go overseas in search of a clearer policy environment. Currently, countries like Dubai and Singapore have more lenient and clear policies than the U.S., and the phenomenon of 'geographic fencing' in the U.S. is emerging.
Colbert, policy director of the well-known decentralized platform dYdX, further added: 'Other countries are moving faster than the U.S. If the new U.S. government is unwilling to remain competitive in the cryptocurrency space, this trend will continue.' Even if the Harris administration relaxes policies in some aspects in the future, a lack of systematic and clear guidelines will inevitably push innovators toward more inclusive markets.
Henley Cryptocurrency Adoption Index ranks the top 10 countries for 2024. Source: Henley & Partners
The investment immigration consultancy Henley & Partners released the 2024 Henley Cryptocurrency Adoption Index, ranking different countries' adoption of cryptocurrencies, placing the U.S. after the UAE, Hong Kong, and Singapore.
Despite this, most large cryptocurrency companies have not left the U.S. Although regulatory attitudes have not been very friendly in recent years, the U.S. market is simply too tempting for many crypto firms to abandon.
It seems that if Harris is elected president, the market clearly needs clear and strong policy signals to stabilize investors' confidence. The current chairman of the U.S. Securities and Exchange Commission's tough regulatory approach has sparked widespread controversy, and the market generally expects that Harris might appoint new leadership after taking office to alleviate industry dissatisfaction.
But the real challenge lies in whether the Harris administration can find the ideal balance between protecting the basic security of the market and promoting the healthy development of the industry. Under looser monetary policies, if a stable policy environment can be provided, the potential of the crypto market will undoubtedly be unleashed.
Dogecoin and the 'king of shilling' Musk amid market fluctuations.
In the tumultuous world of cryptocurrencies, Dogecoin has always been an 'outlier'. Unlike mainstream cryptocurrencies like Bitcoin and Ethereum, Dogecoin not only has high volatility but also carries a sense of mockery and self-deprecation. Who would have thought that this cryptocurrency, initially a joke, would stir up a global craze under Musk's influence? And this 'king of shilling', Musk, has long become the spokesperson for Dogecoin, frequently bringing it into mainstream visibility through his personal tweets and Tesla's financial management, using his personal influence to carve a path for this niche project.
Dogecoin surged by as much as 80% in the past month.
So, the question arises: If Trump wins the 2024 U.S. election and Musk takes charge of the so-called 'Department of Government Efficiency' (DOGE), the Dogecoin market will undoubtedly become more vibrant. But what if Trump fails and Harris is elected?
Harris's policy stance has always been ambiguous, which is not good news for the cryptocurrency market, especially for the highly emotional Dogecoin investors.
Cryptocurrency analyst Crypto Rand predicts that if Harris is successfully elected, market panic may quickly spread. Given that Dogecoin investors often focus more on short-term sentiment, once policies are unclear, the market may enter a short-term sell-off mode. In other words, Dogecoin's price may very likely experience 'free fall', and if this panic sentiment is not resolved in time, it will lead to deeper market fluctuations.
Musk: Aligning with Trump and his 'puppet theory' about Harris.
That said, Musk's performance in this election is also quite eye-catching. As the 'king of shilling' in the tech world, he has clearly aligned with Trump this year, even spending millions of dollars to support his campaign. Through high-stakes lottery activities, he aims to encourage more voters to participate in the election, especially in key states where the competition is tight. This Tesla CEO not only influences through his social media presence but also directly supports the campaign through the U.S. Political Action Committee (PAC), tirelessly standing by Trump.
More provocatively, Musk's view of Harris is noteworthy. In public, Musk has unreservedly referred to Harris as a 'puppet' and stated that she lacks real decision-making power. In his remarks, Harris is portrayed as a 'frontman'—a political tool lacking substantive decision-making authority. Musk's unprecedented, full-throated support as one of America's wealthiest individuals is extremely rare in U.S. history, prompting his remark, 'If Trump fails this time, I might be arrested and lose everything.'
The 'emotional panic' in the Dogecoin market and future risks.
Compared to Bitcoin and Ethereum, Dogecoin's market structure is more sentiment-driven; once investor confidence falters, large-scale sell-offs can easily occur. In the past, with Musk's backing, Dogecoin's price often fluctuated rapidly within a short time. However, if Harris takes office and policies remain unclear, whether Musk’s influence can be sustained remains a question mark.
Especially with Tesla's third-quarter financial report coming out, showing a stabilization in financial performance and unchanged Bitcoin holdings, whether Musk's enthusiasm for Dogecoin will be affected by the political situation has also become a market focus.
If Trump loses, the political pressure Musk faces will sharply increase, and his activity in the cryptocurrency market may significantly diminish. This is clearly bad news for Dogecoin. After all, Musk's support is a key reason for Dogecoin's frequent visibility in the public eye; once his influence wanes, Dogecoin’s price could enter a phase of sentiment-driven volatility, even posing further downside risks.
Conclusion: Unclear policies + market turbulence, Dogecoin must guard against the 'double whammy'
In summary, the unclear policies after Harris's election, Musk's alignment with Trump as a risk factor, and the instability of investor sentiment all make the future of Dogecoin uncertain. Dogecoin's future is likely to be tugged between Harris’s policy tone and Musk's personal influence. For investors, especially short-term speculators, it is essential to be vigilant about changes in market sentiment and not to chase highs and lows easily, to avoid falling into unnecessary risks.
In summary, this 2024 election will not only determine the political landscape in the U.S. for the next four years but may also become a watershed for the fate of Dogecoin and Musk.
Future outlook: If Harris really becomes president, will she reshape the cryptocurrency market landscape?
There are only four days left until the U.S. election voting day, and regardless of who takes office, fluctuations in the crypto market are likely inevitable. In the short term, strict policy control or the benefits of loose monetary policy will only be a peak or trough in the market wave; in the long term, the direction of the crypto market will not change, just that the road will become more tortuous and unpredictable.
As for where the future of cryptocurrency will head, only time will tell.
