In the past week, Bitcoin (BTC) has swung between ~$73,000 and $64,000 displaying significant volatility in the run up to today’s Presidential election. Conventional wisdom is that crypto markets will boom if former President Donald Trump is elected. Things are so clear if Vice President Kamala Harris wins the race as her policies have been vague and Democrats have largely been crypto haters.
A note from Charlie Sherry, Head of Finance and Crypto analyst at BTC Markets, notes that in both the 2016 and 2020 cycle there was Bitcoin volatility as well. In 2016, there was a demand for safe-haven assets in a low interest rate environment and emerging interest for BTC. In 2020 a rise in institutional participation, COVID stimulus money and inflation worries drove Bitcoin pricing. Sherry believes that a Trump victory could lead to more favourable price action in Bitcoin but a Harris victory could remove uncertainty with both outcomes potentially bullish.
Sherry broke down Bitcoin trading as follows:
- Donald Trump: A Trump presidency could favour the crypto industry through deregulation, pro-crypto appointments, and clearer regulatory frameworks. Trump has publicly stated intentions to replace current SEC Chair Gary Gensler. The SEC under Gensler has targeted the likes of Coinbase, Uniswap, and Australia-founded Immutable through Wells notices. The industry has been very vocal about its distaste of this regulation by enforcement approach. A new, possibly pro-crypto SEC chair could shift the regulatory approach from enforcement to clearer regulatory frameworks. This might encourage growth in the industry by reducing regulatory risks for businesses and investors who have been cautious to enter the industry. This may enhance market confidence and encourage investment. Trump’s pro-growth economic policies could indirectly boost crypto trading volumes, while his public support for Bitcoin and digital assets may drive mainstream interest.
- Kamala Harris: In contrast, a Harris presidency might maintain a cautious regulatory approach, likely prioritising protection and compliance, especially if anti-crypto figures like Gary Gensler or Senator Elizabeth Warren continue to influence her administration. This could result in more stringent oversight, though some Democrats advocate for a balanced approach that fosters innovation alongside regulation. While Harris has shown interest in crypto, her position may be perceived as more election-driven compared to Trump’s clear pro-crypto stance, potentially resulting in less concrete action for pro-crypto reform.
BTC Markets (based in Australia) reports that it has seen a significant increase in trading activity, driven by a 33% rise in dormant clients logging in to trade after six months of inactivity in October.