Vice President Kamala Harris was endorsed as the Democratic contender for president by President Joe Biden, who declared on Sunday that he would be leaving the 2024 presidential contest. Only four months before Election Day, this unforeseen revelation has rocked the political and financial worlds, including the crypto community.
My fellow Democrats, I have decided not to accept the nomination and to focus all my energies on my duties as President for the remainder of my term. My very first decision as the party nominee in 2020 was to pick Kamala Harris as my Vice President. And it’s been the best… pic.twitter.com/x8DnvuImJV
— Joe Biden (@JoeBiden) July 21, 2024
With his decision to resign, Biden has created a historic opportunity for modern American politics. This close to election day, no incumbent president has ever declined to run for reelection. Biden said that he thinks “it is in the best interest of my party and the country for me to stand down” in a letter that was made public on Sunday. He intends to serve out his present term without seeking reelection for a further four years.
pic.twitter.com/RMIRvlSOYw
— Joe Biden (@JoeBiden) July 21, 2024
The decision was made in response to weeks of growing Democratic Party pressure as worries about Biden’s age and perceived electability against the presumed Republican contender, former President Donald Trump, mounted. By the end of a possible second term, Biden, who turned 81 in November, would have been 86 years old.
Immediate Impact on Markets
The market’s immediate response to Biden’s exit was largely subdued. U.S. stock futures were essentially unchanged in early trade, with S&P 500 contracts up barely 0.1%. The dollar remained stable in relation to other major currencies. Nonetheless, there were a few noteworthy developments in the crypto sector.
The revelation caused the price of Bitcoin, the biggest digital asset by market capitalization, to rise. Before Biden’s revelation, Bitcoin was trading below $67,000, but it quickly rose beyond $68,000 in a matter of hours. Due to traders starting to assess the possible ramifications of a Trump vs. Harris fight, Bitcoin reached its highest point in more than a month after this move.
Photo: CoinGecko
The upward price movement of Bitcoin and other cryptocurrencies is probably due to the market’s belief that the digital asset industry would benefit more from a Trump presidency. In recent months, Trump’s position on crypto has grown, while the Biden administration has tended to remain more critical and regulatory of the industry.
Crypto Community Reactions
There has been a mixed reaction from the cryptocurrency world to Biden’s departure, with many expressing cautious excitement about the possibility of a more crypto-friendly administration.
The founder of BitMEX and well-known personality in the cryptocurrency world, Arthur Hayes, said that Trump’s chances of winning will drop dramatically if Democrats select a nominee other than Harris. The progress the cryptocurrency sector has achieved in gaining political favor with Trump and his allies may thus be jeopardized as a result.
The chief legal officer of Variant Fund, Jake Chervinsky, saw in Biden’s absence a chance for the Democratic Party to rethink its stance on cryptocurrencies. Chervinsky detailed how a new Democratic nominee might be able to win back cryptocurrency voters in a series of social media posts by highlighting the worth of blockchain, pointing out the flaws in the SEC’s current regulatory strategy, and interacting more positively with industry players.
I think we need to punish the Dems, esp. if their ticket includes Kamala who was VP during this entire disastrous 4 years and who was just endorsed by the head of the "anti-crypto army" They need to do something extraordinary to win back the trust of crypto–maybe in 4 years
— _gabrielShapir0 (@lex_node) July 22, 2024
After four years of what they saw as antagonistic policies during the Biden administration, many in the crypto community, however, are still doubtful that the Democratic Party will be able to win back their confidence. Some contend that the harm has already been done and that those who accept cryptocurrencies are more inclined to vote for Trump or other candidates who embrace them.
Kamala Harris: An Unknown Quantity on Crypto
Vice President Harris is the front-runner for the Democratic nomination, but it is unclear how she feels about regulating cryptocurrencies. In her tenure as Biden’s deputy, Harris has not said anything in public about blockchain technology or digital assets.
Due to her experience working with people with cryptocurrency, including Ryan Montoya, who helped the Sacramento Kings accept Bitcoin and her background in the tech-savvy state of California, Harris has drawn comparisons to Biden when it comes to her approach to the industry. Her exact attitude on crypto remains unknown, though, given her connection with the present administration’s generally unfavorable posture.
According to financial declarations, Harris and her spouse would rather invest in conventional assets like Treasury bonds than cryptocurrencies at this time. Her lack of personal experience in the field raises more questions about her likely approach to crypto policy as a presidential candidate.
The Trump Factor
Although Biden’s resignation has given the Democratic Party fresh prospects, it has also cemented Donald Trump’s standing as the leader of the Republican Party. As part of his campaign approach, Trump has been endorsing cryptocurrency with growing vociferation, painting himself as an advocate for freedom and innovation in finance.
Trump’s connections to the cryptocurrency world will be strengthened when he speaks on July 27 at an important Bitcoin conference in Nashville. Together with the conference, he also has plans to hold a lavish fundraiser where each guest is expected to contribute $844,600, a move that highlights the increasing political power of cryptocurrency money.
In an attempt to balance his pro-crypto position with what he perceives as the Democrats’ unduly restrictive posture, the former president has presented crypto as a “wedge issue” in the forthcoming election. Some voters seem to be responding favorably to this tactic, especially in swing areas where, according to recent surveys, one in five registered voters saw crypto policy as an issue of concern.
Potential Impact on Crypto Regulation
The political climate that surrounds cryptocurrencies and blockchain may change dramatically as a result of this change. Agencies like the SEC have adopted an aggressive enforcement-based strategy for regulating digital currencies under the Biden administration, which has resulted in high-profile litigation disputes involving major sector participants.
A Trump government, or even a Harris administration wanting to set itself apart from Biden’s agenda, may result in a more accommodative regulatory environment. This might involve more transparent rules for classifying tokens, expedited procedures for allowing cryptocurrency businesses to function lawfully, and an all-around more positive outlook on blockchain innovation.
It’s crucial to remember, though, that policy implementation doesn’t always follow campaign rhetoric. Given the intricate nature of governance and the imperative to maintain a balance between consumer protection and innovation, substantial changes to cryptocurrency regulations are probably going to occur gradually rather than all at once.
Global Implications of Digital Assets
The results of the US presidential election will have consequnces that extend well beyond the country’s boundaries, especially with regard to the acceptance and regulation of cryptocurrencies. Since the United States is home to many of the most powerful tech businesses, its policy decisions frequently serve as models for other countries.
Blockchain and digital assets may become more widely used worldwide if the U.S. government becomes more welcoming to cryptocurrencies. It may also have an impact on global conversations about issues like cross-border payments, CBDCs, and the place of crypto in the global economy.
On the other hand, should the incoming government decide to maintain or tighten the present regulatory framework, it would encourage other nations to adopt a more restrictive stance towards cryptocurrencies, which might hinder innovation and force businesses to relocate to more hospitable jurisdictions.
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