What could happen if either Trump or Harris wins?
Watch video on altFINS with CEO covering the potential outcomes of Trump vs. Harris and impact on the economy, stocks and crypto.
During October, the odds of Trump wining have steadily increased and we saw that translate into a nice rally in crypto, lead by Bitcoin attacking ATH at $74K.
But just in the last 4 days, the markets are getting cold feet and Trump’s odds of winning declined somewhat, which also translated into a pullback in BTC and altcoins.
In terms of macro economy, many economists and wall street analysts believe that Trumps’ economic policies could reignite inflation. Specifically, he wants to reduce taxes, which increases budget deficit, and place many very high tariffs on imports, especially from China, which could translate into higher consumer prices and therefore inflation.
That would in turn mean that the US Central Bank would need to pause their interest rate cuts and maybe even reverse that and start hiking. That would be negative for risk assets like stocks and crypto.
So what would Trump’s win mean for crypto? If we believe what Trump has been saying, it should mean more favorable regulation in the US for utility tokens by DeFi projects. Because these are the the biggest crosshairs with the SEC. Projects like token lending platforms, DEX, staking platforms,etc. So this would include AAVE, MKR, LDO, BAL, CRV, UNI, SNX, GMX, RPL….
So any project that actually provides some financial value to token holders.
Remember that Trump was a huge critic of crypto in his first presidential term but appears to have flipped his agenda.
Can we believe him? Maybe. It appears that he has now vested interest in favorable crypto regulation because he wants a weaker dollar and also because he’s associated with the launch of Trump Liberty Financial, a crypto project where Trump family gets 75% of coin sales and any revenues.
Trump’s win should of course also be bullish for BTC, ETH and MEMEs and any project that has been under SEC investigation like Ripple (XRP).
On the other hand, a win by Harris is less clear and less positive. Dems have promised a more reasonable regulatory approach than what we’ve seen under Biden so far, but there are few specifics supporting such change in regulatory environment.
So if Harris wins, crypto is likely to pull back. However, BTC and ETH are likely to be winners because these two have already cleared regulatory scrutiny and we’ve seen traditional finance gradually adopt these two, especially BTC, in their portfolio allocations.
Arguably, under Harris administration, the BTC dominance would increase as BTC would suck up more capital allocations and benefit from flight to safety within the crypto sector, away from altcoins.
It would also be a negative for the utility tokens of DeFi projects because they’re under the greatest reg scrutiny.
Ironically, we could argue that the MEME coins could flourish exactly because they don’t provide any value to token holders, therefore, they don’t face the SEC regulatory risk.
So what to do as a trader?
If you have a strong view on who’s going to win, then you could either buy crypto if you think Trump wins or short sell if Harris wins.
It appears that Trump’s win is not fully baked into asset prices because we’ve seen a pullback in the last few days.
You could find some assets in uptrend that are near their support areas. (See live market scan results here).
Another source of potential trading ideas is our Technical Analysis section, with both, Buy and Sell trade setups for over 60 major altcoins.
Disclosure: Not meant to be financial advice. For informational purposes only. Do your own research.
