Heading into the ultimate stretch of the 2024 presidential campaign, the Republican Party appears to have the upper hand with pro-crypto voters. Former president Donald Trump has outlined a pro-Bitcoin (CRYPTO: BTC) agenda, even going to this point as to proclaim that he wants America to grow to be the “crypto capital of the planet.”
In contrast, the Democrats don’t seem like offering much of anything. In actual fact, there is no mention of “crypto” or “digital assets” anywhere within the 91-page Democratic party platform. The Biden-Harris administration has largely been viewed as anti-crypto, and a number of the names which can be being floated as potential economic advisors within the Harris-Walz administration are also viewed as skeptical of the cryptocurrency movement. With that in mind, here’s how a Democratic victory could impact the cryptocurrency market.
Bitcoin
A Democratic victory could put a cap on just how much higher Bitcoin might go throughout the current market cycle. Right away, the present consensus is that Bitcoin has the potential to double in price to anywhere from $100,000 to $150,000 by the tip of 2025. But that robust forecast, based partially on the idea of Trump defeating Biden, could change now that a Democratic victory is looking way more likely with Kamala Harris because the party’s candidate.
It is not a lot that the Harris administration goes to crack down on crypto, or that they will adopt anti-Bitcoin policies. It’s that they aren’t planning on doing anything latest. Unless some latest development forces the Harris administration’s hand, meaning no latest comprehensive regulatory framework for crypto, no latest tax policies to encourage crypto investing, and no latest fiscal policies to stimulate Bitcoin mining.
This last point is value particular attention, on condition that the Biden-Harris administration has generally tended to view Bitcoin mining as energy-inefficient and a drag on the nation’s power grid. In September 2022, for instance, the White House released a comprehensive report on digital assets, finding that Bitcoin mining was largely at loggerheads with green economic policies.
Altcoins
Altcoins (typically defined as any cryptocurrency that is not Bitcoin) could also suffer. That is resulting from the impact that an uncertain regulatory environment has on the chance appetite of investors. Put one other way, investors are much less likely to speculate in speculative coins if there’s the chance that the federal government could classify those coins as securities.
Given the dearth of a comprehensive regulatory framework for crypto, the SEC has largely taken the lead on the regulation of crypto. And that has led to some head-scratching decisions, including a crackdown on activities reminiscent of crypto staking, and many mixed messages about which coins might actually be securities. At one point, the SEC even suggested that Ethereum (CRYPTO: ETH) is perhaps a security!
The excellent news here is that the Democratic party may finally be seeing the sunshine. Just days before the Democratic National Convention kicked off in Chicago, a bunch of influential crypto investors calling themselves “Crypto4Harris” hosted a virtual town hall featuring several top Washington lawmakers, including Sen. Charles Schumer (D-NY).
One big takeaway of the event was that the Financial Innovation and Technology for the twenty first Century Act (FIT21) could get passed very soon. That will be huge, because this pro-crypto laws specifically calls for digital assets to be regulated as commodities, and never as securities. That will mean little or no role for the SEC going forward, and an even bigger role for the Commodity Futures Trading Commission (CFTC).
Crypto stocks
Finally, it is important to think about the potential impact of a Democratic victory on crypto stocks. Primarily, this includes Bitcoin mining stocks. For now, it doesn’t look good for these corporations. Marathon Digital Holdings (NASDAQ: MARA), for instance, has even privately suggested that it is going to start to maneuver more of its mining operations overseas if the subsequent presidential administration doesn’t take a more pro-Bitcoin approach.
And do not forget about Coinbase Global (NASDAQ: COIN), the world’s second-largest cryptocurrency exchange. Any deterioration in sentiment within the crypto market has a direct impact on trading volume and the willingness of investors to place their money into risk assets. The SEC has repeatedly taken motion against Coinbase and popular coins traded on its platform, so a Democratic victory may very well be a green light for more of the identical troubling activity.
Learn how to spend money on crypto in 2025
Let’s assume that the Democrats do win the election in November 2024. What then? You should not panic and dump your Bitcoin, in fact. But it’s worthwhile to be loads smarter about learn how to construct a crypto portfolio. For instance, it is advisable to get hold of green Bitcoin mining stocks reminiscent of CleanSpark (NASDAQ: CLSK) which can be using clean energy sources to mine Bitcoin. That concept might need more appeal under an eco-conscious administration.
That being said, it is best to definitely keep your expectations in check in relation to crypto in 2025. With out a big pro-crypto push from the brand new presidential administration, I would not be holding my breath waiting for Bitcoin or other cryptos to skyrocket in value.
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Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Idiot has positions in and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Idiot has a disclosure policy.
Here’s How a Democratic Victory Could Affect the Cryptocurrency Market was originally published by The Motley Idiot