Bitcoin, known for its volatility and for being an asset sensitive to economic and political events, has been on the radar of many investors, especially as the 2024 US presidential election approaches.
The last few weeks have seen an intense rally, with a new ATH (all time high), with the value of BTC reaching an unprecedented range of US$71,000. At the moment, we are in the range of US$68,000, with investors awaiting further news and the outcome of the US election.
In an electoral scenario that promises to bring significant changes to the financial market, the outcome of the dispute between Donald Trump and Kamala Harris could have a direct impact on the price of Bitcoin. But which way should it move in each scenario? Let's explore the predictions and potential consequences of this major political event.
The Context: Why Do Elections Matter for Bitcoin?
The crypto market is not isolated; it responds strongly to economic and political movements, especially when they involve the world’s largest economy, the United States. In recent years, economic policies that encourage the devaluation of the dollar, increased regulation, and even the inclusion of Bitcoin in some strategic reserves have become hot topics among candidates.
While Donald Trump and Kamala Harris have differing views on how to handle the cryptocurrency market, a victory for either of them could offer a new direction for Bitcoin – whether as a store of value or as a regulated asset class.
1. A Trump Victory and the Potential Effect on Bitcoin
Donald Trump's campaign, which has recently aligned itself more with the crypto sector, promises a bolder approach.
Trump has expressed support for the development of a strategic Bitcoin reserve in the US, which, if implemented, could create a base of institutional demand and even a way to legitimize the digital asset. In addition, this initiative would reinforce Bitcoin's image as a store of value, which tends to bring positive pressure on prices.
Other key points that could affect the price of Bitcoin in the event of a Trump victory include:
Institutional Adoption: With a strategic reserve proposal, Bitcoin could see a new wave of institutional adoption, spurring the purchase of the asset by large funds and investors.
Less Regulatory Control: Trump's vision tends to be more focused on deregulation, which could give more freedom to the crypto market, increasing the liquidity and value of Bitcoin in the short and medium term.
With these factors in mind, analysts believe that a Trump victory could send Bitcoin’s price to new highs, with expectations of up to 20% appreciation in the months following the announcement of a Bitcoin strategic reserve project. Such a move would be seen as a modern-day “gold rush” and would attract new investors to the market.
2. A Kamala Harris Victory and the Path to Regulation
Kamala Harris, on the other hand, has a more regulatory stance towards the crypto market. The current vice president and her campaign are aligned with the regulations that the Biden administration has been promoting to bring more security to the market.
If elected, Harris is expected to continue financial regulation to ensure that Bitcoin and other digital assets have greater oversight, including combating potential fraud and money laundering. This has both advantages and disadvantages for Bitcoin:
Investor Confidence: Greater regulation may drive away those who seek a completely independent asset in Bitcoin, but it also attracts traditional investors, who see regulation as a security to enter the market.
Price Stability: Regulation tends to stabilize the market, which is good for those seeking less volatility in Bitcoin, but it decreases the potential for short-term price explosions.
In this scenario, the price of Bitcoin could go through a more gradual appreciation phase, with more stable growth. The expectation is that Bitcoin will reach a more predictable value throughout 2025, depending on the regulations that will be implemented, but the sharpest fluctuations would be less present.
3. Short-Term Impacts: Which Way Could Bitcoin Move?
Regardless of the election outcome, Bitcoin is likely to react with volatility in the short term. A Trump victory could mean a jump in the price of Bitcoin, with investors anticipating an increase in demand for digital assets as a store of value strategy. However, this rally could be temporary, as the market would still need concrete actions from the government to sustain a long-term appreciation.
With Harris, the initial expectation may be a slight price pullback, especially among investors who fear stricter regulation. However, the medium and long term may see a strengthening of the market, as solid regulations create a more reliable environment for traditional investors.
4. Analysts' View: Price Prediction for Each Scenario
Market experts have pointed out that, in the event of a Trump victory, Bitcoin could break new highs in 2025, reaching levels close to US$70,000 to US$100,000, depending on the economic policies implemented.
With Harris, the scenario suggests a slower but still optimistic evolution, with projections between US$55,000 and US$70,000, driven by regulatory certainty and investor confidence.
Conclusion: Regardless of Who Wins, Bitcoin Is in the Spotlight
Ultimately, the 2024 US elections bring different expectations for the crypto market, but both suggest a promising future for Bitcoin.
With Trump, the asset could appreciate rapidly due to possible deregulation and strategic reserve of Bitcoin in the US. With Harris, the market could strengthen gradually, but more safely.
For Bitcoin investors, the advice is to pay attention to the first statements made by the president-elect, as decisions made in the first months of his government will have a decisive role in the price of Bitcoin in 2025. Whatever the outcome, it is certain that the current scenario has put Bitcoin on the US political agenda, making it an asset class that will not be ignored any time soon.
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Photo by memory_stockphoto, available on Freepik
