The 2024 US Presidential election will likely go down in history as one of the most eventful. What began as a battle between Democratic candidate Joe Biden and Republican Donald Trump is now a race between current Vice President Kamala Harris and Trump.
This presidential run caught the world’s eye, with current President Biden dropping out and Trump almost getting assassinated. Another significant impact of this election is observed in the crypto market, with substantial investments in political campaigns to support pro-crypto candidates and influence legislative outcomes.
SOURCE: CNN
The growing influence of cryptocurrencies in U.S. politics is evidenced by the surprising bipartisan support for crypto-friendly legislation, with figures like Senate Majority Leader Chuck Schumer and former House Speaker Nancy Pelosi aligning with the industry’s interests. This shift in political attitudes towards cryptocurrencies has been driven by the industry’s efforts to gain legitimacy and secure lighter regulatory treatment in Washington.
Ultimately, what sets this market cycle apart is the unprecedented level of discussion about crypto among the US political elite. We’re also witnessing a growing influence of the sector on political rhetoric, and conversely, how politics is shaping crypto market trends.
The Current Political Landscape and Its Impact on Crypto
The U.S. political landscape is a dynamic and influential force shaping the future of the cryptocurrency industry. As the 2024 presidential election approaches, the general stance of the two major political parties towards crypto has started to crystallize, albeit in distinct ways.
Harris has a nuanced relationship with the crypto industry. Under the Biden administration, which she serves, there has been significant government engagement with the sector. The administration has followed a strategy to balance innovation and economic growth with consumer protection and regulatory oversight. For example, Biden’s executive order in March 2022 outlined a comprehensive approach to assess the risks and benefits of cryptocurrencies, focusing on critical areas like consumer protection and global competitiveness.
However, Harris herself has yet to take a definitive public stance on crypto. This ambiguity leaves room for speculation, especially since the Democratic Party’s 2024 platform notably skips any mention of cryptocurrency regulation. Despite this, Harris’s longstanding ties to the tech industry, dating back to her tenure as Attorney General in California, suggest she will likely take a more moderate approach. Her tech connections have recently been highlighted by endorsements from figures like JP Thieriot, a crypto platform Uphold board member, who supports Harris for her potential to balance innovation with regulation.
On the other end of this political spectrum, Donald Trump has shown a remarkable switcheroo in his views on crypto. Former skeptic Trump has now embraced crypto with open arms, likely influenced by the growing political and economic clout of digital assets. His recent moves, such as accepting campaign donations in digital currencies and advocating for U.S.-based Bitcoin mining, hint at a more pro-crypto stance. In fact, Trump’s appearance as the keynote speaker at the Nashville Bitcoin 2024 conference cemented his pro-crypto stance. His declaration of support for cryptocurrencies, the possibility of creating a national Bitcoin stockpile and the plan to make America the Bitcoin superpower of the world was very well received by the crypto commuinty. Trump’s rhetoric, including promises of friendly regulations, dismissal of current SEC chairman Gary Gensler, and tax cuts that would benefit crypto investors, contrasts sharply with the Biden administration’s cautious approach.
Soure: The New York Times
Trump’s position reflects a broader Republican strategy that is becoming more favorable towards crypto, particularly as the party seeks to differentiate itself from Democratic regulatory tendencies. The influence of crypto-friendly figures within the Republican Party, like Vivek Ramaswamy, who advocated for blockchain technology and Bitcoin, has further nudged Trump towards embracing the sector. Another point that highlights Trump’s pro-crypto stance is his choice of Vice President, JD Vance, who is notably bullish on the sector and supportive of crypto.
The attempted assassination of Donald Trump on July 13, 2024, coincided with a notable rally in Bitcoin’s price as seen in the chart below, highlighting the intricate relationship between political events and cryptocurrency market dynamics. This convergence is significant as it illustrates how crypto participants are acutely aware that this market cycle is heavily influenced by political developments.
As crypto becomes more intertwined with US politics, participants in the market are demonstrating a keen understanding of how political narratives can shape investment strategies and market sentiment.
The Great Divide: Democrats vs. Republicans on Crypto Regulation
The divide between Democrats and Republicans on cryptocurrency regulation is both historical and deeply entrenched, with each party’s approach reflecting its broader ideological commitments. Historically, Democrats have advocated for more stringent regulation, focusing on consumer protection, financial stability, and mitigating risks associated with digital assets.
Biden’s executive order in 2022, which aimed to assess the risks and benefits of digital assets, is a prime example of the Democratic focus on balancing innovation with consumer protection and market integrity. The administration’s subsequent frameworks and proposals have consistently reflected this balance, aiming to prevent market abuse.
Republicans, on the other hand, have generally been more laissez-faire, viewing cryptocurrencies as an avenue for innovation and economic growth with less emphasis on regulatory oversight.
The Republican Party’s historical stance on crypto has been more aligned with free-market principles. This perspective became particularly apparent during Trump’s presidency, where, despite some initial skepticism, the administration leaned towards a more hands-off approach. The Republican emphasis on deregulation and lower taxes was evident in Trump’s signing of the Tax Cuts and Jobs Act in 2017, which, while not specific to crypto, had significant positive ripple effects on the market, boosting Bitcoin’s value at the time.
The contrast between the two teams’ approach to crypto and Web3 is made even more apparent by the SEC’s recent actions. Team Trump, on one hand, has been hinting at a mysterious new crypto project, World Liberty Financial, pursuing his vision of making America the crypto capital of the planet. Meanwhile, the SEC, under the Democratic government, has been serving Wells notices to the NFT marketplace, OpenSea, declaring NFTs as securities.
While Republicans eye lower taxation on crypto and other assets, the Kamala Harris led Democrats are gearing up for a revised budget proposal which could potentially tax capital gains at 44.6% and unrealized gains at a minimum of 25% for citizens with over $100 million in wealth. Netizens have already begun showing their displeasure with the new plan clearly implying that this could have major negative consequences for the democratic campaign.
Current Stances and the Path Forward
Today, the divergence between the two parties is more pronounced than ever. The Biden administration continues to emphasize the need for comprehensive regulation, as seen in its 2025 budget proposal, which includes measures to prevent rapid digital asset trading and proposes an excise tax on cryptocurrency mining. This regulatory push aligns with the broader Democratic strategy of increasing oversight to protect consumers and ensure market stability.
The implications of this regulatory approach could be significant for the crypto market. Stricter regulations may slow speculative trading and increase volatility as investors react to the evolving landscape. Conversely, a clear regulatory framework could foster better institutional investment, providing the legitimacy and security that many investors seek. Ultimately, the upcoming election’s outcome will be crucial in determining whether the crypto market will thrive in a more permissive environment or buckle under the pressure of stifled innovation and growth.
Trump and the Crypto Vote: A Strategic Alliance?
Trump’s shift towards a crypto-positive stance is more than just a policy position—it’s a strategic alliance aimed at garnering support among the growing community of crypto enthusiasts. By aligning with this group, Trump is tapping into a tech-savvy, financially motivated, and increasingly influential voter base. His promise of lower taxes and reduced regulation resonates deeply with crypto investors, who view these policies as essential for digital asset growth and mainstream adoption.
This alignment could impact the crypto market, particularly if Trump secures the presidency. A pro-crypto administration may lead to a surge in investment as market participants respond positively to the prospect of clearer regulatory oversight and favorable tax policies. Analysts have noted that the “Trump factor” is a potential catalyst for Bitcoin’s value, with predictions of substantial price increases if he returns to the Oval Office.
The alliance of the crypto market and the Republicans is also giving rise to a new sector within the crypto market: PolitiFi meme coins. These digital assets blend political commentary with financial speculation.
PolitiFi Coins: Merging Political Activism with Cryptocurrency
Politifi coins, a popular subset of meme coins, serve as an avenue for people to show support towards certain politicians or their ideologies. PolitiFi meme coins are turning the crypto market into a battleground for political popularity.
PolitiFi tokens represent a new and unique category of cryptocurrencies that intertwine political themes with financial investment, particularly gaining traction as the U.S. presidential elections approach. These tokens are designed to facilitate engagement with political movements, campaigns, and causes, allowing supporters to invest in and rally around specific political ideologies or figures.
Trump’s embrace of crypto has catalyzed this trend, with supporters creating tokens that celebrate his policies or mock his opponents. These coins are a form of political expression and a speculative asset, reflecting the crypto-political alliance’s broader cultural and financial implications. A recent survey conducted by Coingecko even point to PolitiFi tokens performing 8 times greater than the broader memecoin sector year to date.
This surge indicates that these tokens are not merely financial instruments but also vehicles for political engagement, allowing supporters to express their allegiance. It also highlights a shift in how political support is manifested in the digital age, merging financial investment with political activism.
Top Politifi Token By Market Cap
As the intersection of politics and cryptocurrency continues to evolve, several politifi coins have emerged, reflecting the growing influence of digital assets in the political arena. Here are the top five political coins based on market cap-
- ConstitutionDAO (PEOPLE)
Current market cap: $372,481,609
ConstitutionDAO (PEOPLE)
SOURCE: CoinMarketCap
- MAGA (TRUMP)
Current market cap: $153,156,606
MAGA (TRUMP)
SOURCE: CoinMarketCap
- MAGA Hat (MAGA)
Current market cap: $33,113,578
MAGA Hat (MAGA)
SOURCE: CoinMarketCap
- Super Trump (STRUMP)
Current market cap: $14,455,569
Super Trump (STRUMP)
SOURCE: CoinMarketCap
- Doland Tremp (TREMP)
Current market cap: $12,873,709
Doland Tremp (TREMP)
SOURCE: CoinGecko
PolitiFi coins are poised to play an increasingly important role in both political and financial spheres. These tokens represent a new form of political expression, allowing supporters to back their favorite causes with their wallets while potentially profiting from the market dynamics driven by election-related events.
Potential Market Outcomes Based on Election Results
The outcome of the 2024 U.S. presidential election could have profound implications for the cryptocurrency market, with distinct scenarios emerging depending on whether Democrats or Republicans secure victory.
If Democrats Win
A Democratic victory, particularly under a Harris administration, may lead to a cautious approach towards cryptocurrencies. Historically, the Democratic Party has been perceived as skeptical of the crypto sector, often prioritizing regulatory oversight over innovation. While there are signs of increasing engagement with the crypto community, such as the potential passage of the Financial Innovation Technology for the 21st Century Act (FIT21), the overall sentiment may remain conservative.
1. Market Volatility: Investors might experience a period of volatility rather than growth, as the administration is unlikely to introduce aggressive policies to boost crypto investment. Moreover, the lack of a comprehensive regulatory framework could lead to uncertainty, dampening enthusiasm for the asset class.
2. Impact on Altcoins: Altcoins may face challenges as regulatory scrutiny could increase, particularly regarding their classification as securities. This uncertainty could lead to reduced investment in these assets, curbing innovation and market growth.
If Republicans Win
Conversely, a Republican victory, especially with Trump at the helm, could herald a more favorable environment for cryptocurrencies. Trump’s pro-crypto stance and his call for the U.S. to become the “crypto capital of the world” resonate with a significant portion of the electorate that values financial innovation.
1. Market Surge: A Republican administration is likely to foster a more bullish environment for cryptocurrencies, potentially leading to significant price rallies. The anticipation of favorable policies could attract both institutional and retail investors back into the market.
2. Regulatory Clarity: With a Republican leadership, there may be efforts to streamline regulations, providing clarity that could encourage investment and innovation within the crypto space. This could also lead to increased confidence among investors, driving up demand for both Bitcoin and altcoins.
3. Increased Adoption: A supportive stance from a Republican administration could enhance the legitimacy of the cryptocurrency sector, potentially attracting substantial institutional capital. As institutional investors look to diversify their portfolios, clearer regulations and a favorable political climate could lead them to allocate more resources to digital assets.
In summary, the political landscape is poised to significantly influence the cryptocurrency market. A Democratic win may lead to a more cautious outlook and regulatory scrutiny, while a Republican victory could unleash a wave of optimism and investment, propelling the crypto sector to new heights.
Conclusion
The upcoming U.S. elections in November 2024 hold significant implications for the cryptocurrency market, making it crucial for investors to closely monitor the political landscape. The engagement of politicians from both major parties with cryptocurrency issues reflects a growing recognition and adoption of digital assets within mainstream politics. This shift indicates that cryptocurrency is no longer viewed as a fringe investment but rather as a vital component of the financial landscape that cannot be ignored.
The significance of the U.S. elections extends beyond national borders, as the decisions made in Washington can set precedents for other countries grappling with their own cryptocurrency regulations. A pro-crypto administration could legitimize the sector, potentially leading to a substantial influx of institutional capital and encouraging other nations to adopt similar frameworks.
Conversely, a restrictive approach could lead to increased regulatory fragmentation, pushing innovation and investment to more crypto-friendly jurisdictions. The choices made in the voting booth could well determine the trajectory of this transformative technology, marking a pivotal moment in the crypto industry’s history.
REFERENCES:
- Kamala Administration Plans to Tax unrealized Gains- https://news.bitcoin.com/insiders-report-report-kamala-harris-backs-bidens-plan-to-tax-unrealized-gains/
- What are Politifi Coins- https://www.coingecko.com/research/publications/politifi-coins?utm_campaign=Data%20Visualization&utm_source=x&utm_medium=social
- 2024 Election: The Role of Crypto- https://www.grayscale.com/elections#block-6495
- Trump and Crypto Markets- https://www.disruptionbanking.com/2024/07/16/how-is-the-trump-trade-impacting-crypto-markets/
Siri is a writer venturing into the exciting realms of blockchain technology, cryptocurrency, and decentralized finance (DeFi), eager to explore the transformative potential of these innovations. She brings a unique perspective that bridges traditional industries and cutting-edge technology, often infused with a touch of humor through memes. She has a rich background in real estate and interior design, having previously contributed to NoBroker, where she crafted blogs and assets on these topics.
