The results of the US presidential election, scheduled for November 5, are called one of the key events in the near future, which may affect the price of Bitcoin. Republican representative Donald Trump is considered a pro-cryptocurrency candidate. But US Vice President Kamala Harris, a Democrat, is also promising support for the digital asset market.
By opinion “the most accurate economist” and the best forecaster in the USA according to Bloomberg Christophe Barrault, Trump is more likely to win. At the same time, average data from the FiveThirtyEight portal (a project of the ABC television channel) as of October 29 show that the level of support for Trump is 46.6%, Harris – 48.1%.
According to data from the cryptocurrency betting platform Polymarket at 18:00 Moscow time on October 30, participants in the Presidential Election Winner 2024 pool thinkthat the probability of victory for the former president is 67%, and for the current vice president – 33%. The volume of bets on this pool has already exceeded $2.6 billion.
Experts told RBC-Crypto about how the possible victory of Kamala Harris in the US presidential election will affect Bitcoin and cryptocurrencies in general.
“We shouldn’t expect a large-scale collapse”
BitRiver financial analyst Vladislav Antonov
Speaking about the impact of Harris’s possible victory on Bitcoin, it is worth noting that the change of president in the United States itself is unlikely to be a critical factor for the cryptocurrency market. The Democratic administration is already in power, and no fundamental change in course can be expected.
Short-term volatility during the announcement of election results is possible – this is a natural market reaction to any uncertainty. However, you should not expect a large-scale collapse, since Harris’s position on cryptocurrencies is quite predictable and has already been taken into account by most large investors in their strategies.
In the long term, fundamental factors will be much more important – primarily halving and its historically positive impact on the price of Bitcoin. The limited issuance of cryptocurrency, growing institutional interest and the development of market infrastructure also play an important role.
In terms of regulatory policy, Harris does advocate for increased oversight of the cryptocurrency market. However, this is not about prohibitive measures, but rather about creating clearer rules of the game with an emphasis on protecting consumers and ensuring financial stability. In conditions of high inflation, Bitcoin may even strengthen its position as a store of value.
Movement towards the $100 thousand mark in the coming year looks quite realistic, regardless of the outcome of the elections. The key drivers of growth will be factors such as halving, rate cuts by the US Federal Reserve and an increase in institutional presence in the market, rather than political conditions.
“The crypto market has also experienced great turmoil”
Co-founder of the ENCRY Foundation Roman Nekrasov
In the moment, the reaction to Harris’ victory will likely be extremely negative. The fact is that, despite the vice president’s attempts to flirt with crypto investors, her initiatives are aimed more at creating a clear legal framework for cryptocurrencies, rather than at comprehensive support for the crypto community. Therefore, members of the cryptocurrency community prefer Trump’s candidacy, which means that the victory of his rival could result in a market decline.
But don’t be dramatic. The crypto market has also experienced great turmoil. Ultimately, the Harris team is aware of the increased weight of the voices of members of the crypto community, which means that we should not expect radical measures from her that could make life much more difficult for representatives of the crypto industry.
In addition, the vice president made a number of promises that could become a shield for the crypto community. For example, as part of the protection of ethnic groups, it plans support crypto investors. It is unlikely that a market collapse due to the adoption of prohibitory measures will contribute to the implementation of the initiative. Therefore, the emotional drawdown will likely be followed by a systematic recovery, which will be helped by further Fed rate cuts.
However, the inability to implement Trump’s initiatives against the backdrop of Harris’ victory could be an unpleasant slap in the face for the market. For example, the politician promised not to use up US bitcoin reserves. Under Harris’ leadership, they can get rid of them. The effect could be the same as in the case of the sell-off in German Bitcoin reserves, which the market experienced in the summer. But even in this case, the drop will be compensated over time.
If we talk about long-term prospects, a Harris victory will not stop the market growth, but it may reduce its amplitude. In this case, Bitcoin’s cyclical high may be recorded significantly below expectations.
However, it is not worthwhile to say unequivocally that Harris can put pressure on the crypto industry. All risks, with the exception of emotional drawdown in the moment, are illusory in nature.
“There is an excess in the price”
Managing Partner of VG Group Vagiz Nurullov
Asset pricing today can be very dependent on future price expectations. High expectations inspire optimism and force people to buy the asset, which in turn drives up the price.
If we are talking about the price of Bitcoin and its dependence on the elections in the United States, then two factors influence this: betting on the winner and economic policy, which has a direct impact on the cash flows of companies. Dividends depend on these flows, which further influence stock prices, indices and the state of the stock market.
The market today is pricing Trump’s victory into the price of Bitcoin. There is a surplus in the price now, but when the elections are over, the asset will lose this surplus even if Trump wins. If Harris wins, the asset will not only lose this surplus, but will also fall further.
Harris supports reforms aimed at helping the middle class and small businesses, as well as increasing taxes on wealthy corporations. She advocates for raising the minimum wage and strengthening workers’ rights. All these measures worsen the position and performance of a business, which reduces its capitalization and attractiveness. Bitcoin, in turn, actively reacts to the position of the stock market, which may not perform well under the circumstances of such a policy.
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Source: Cryptocurrency
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