Author: José Oramas, Crypto News; Translated by: Baishui, Golden Finance
Bernstein analysts believe that Bitcoin’s decline is related to Kamala Harris’s support in the polls against Donald Trump, and investors believe that a Harris administration may be unfavorable to cryptocurrencies.
Harris’ rising odds on Polymarket have kept Bitcoin in a limited range, preventing it from reaching previous highs, the report said.
Cryptocurrency in general remains a sensitive political issue, and with the U.S. presidential election approaching, both parties recognize its importance.
Bitcoin is plunging because of Kamala Harris.
Well, that’s what the Bernstein analysts suggest: As Harris wins over former President Donald Trump in the polls, sentiment in the crypto market appears to be taking a negative turn, primarily because some investors and crypto community members believe that a Harris administration could be bad for crypto.
This may not be surprising, as the Biden administration has been criticized for being too strict on cryptocurrencies. However, the criticism can be mainly attributed to Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC).
Additionally, Bernstein analysts noted that Harris’ rising odds on Polymarket have made cryptocurrency markets nervous, keeping Bitcoin in a limited range and preventing it from recovering its previous highs of around $70,000 (A$106,000) in June.
Polymarket phenomenon
Oh, prediction markets… You don’t need a research firm to publish poll results or conduct extensive research and analysis on the political landscape. Just take a look at Polymarket and you’ll know who will be the next president of the United States.
Source: 2024 Presidential Election Winner, Polymarket
That’s because Polymarket has developed excellent product-market fit (PMF). Its straightforward approach to cryptocurrency betting makes it a reliable indicator of investor sentiment, especially in the political space. The more bettors bet on Harris, the more they are confident in her chances of winning the election.
It’s simple: If bettors believe a particular candidate is gaining momentum, this could generate bullish sentiment, pushing up cryptocurrency prices to a certain extent. Conversely, if confidence in a particular candidate declines, it could cause panic.
“Our reading of current market sentiment is that a Trump win is bullish, while a Harris win is bearish (at least in terms of immediate market reaction),” the note reads.
Cryptocurrency as a sensitive political tool
During his tenure, Gensler vigorously enforced regulations for cryptocurrency companies (and the industry as a whole), and he infamously called cryptocurrency companies plagued by "scammers, fraudsters, and scam artists."
Gensler’s approach to cryptocurrency regulation has drawn a backlash from the industry, with key figures like Coinbase CEO Brian Armstrong arguing that heavy (and unclear) regulatory oversight stifles innovation and pushes businesses to more crypto-friendly countries.
All in all, it seems that cryptocurrency will continue to be a sensitive topic in political developments, especially now that the US presidential election is scheduled for November. No wonder both parties recognize the importance of the cryptocurrency industry. Whether they attract voters or really care about this industry remains to be seen in the coming months.
