What’s Going To Happen To Crypto When The New POTUS Is Elected?
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With just a few days until the election, crypto investors are considering their portfolios and the likely effects that election results will have. Following the past two elections, crypto prices have seen substantial increases, but that’s based on very limited history.
Both candidates have expressed degrees of support for crypto and received varying levels of backing from industry figures, so the decision of who runs the country will likely impact crypto prices.
The Cryptocurrency Market
With more than 3,000 cryptocurrencies available to buy on centralized and decentralized exchanges, it can be difficult to choose the best crypto to buy right now. But, as cryptocurrency is pushing for regulatory approval around the world, which is directly influenced by political leaders and their position on crypto, election watching can prove a valuable source of information.
For example, Ether has long-term prospects that may see its post-election value rise significantly, despite somewhat losing some of its hold against Bitcoin. Crypto is growing increasingly useful in various industries, such as the iGaming (online gambling) sector. Thanks to many states’ restrictive rules about these sites, a growing number of players instead visit the top offshore casinos in the US where they can play with crypto in a legal gray area, to enjoy casino games for real money from home.
Many investors are also choosing to diversify their portfolios with crypto, particularly newly-launched and presale coins that have the potential to grow in value hundreds or even 1000 times over.
With both election candidates interested in and in largely in favor of crypto, the sector as a whole, and others that rely on it, could see great benefits.
Historical Performance
Historically, prices have increased in the 12 months following elections. But, that only really gives us two data points – the 2016 and 2020 elections.
12 years after the 2016 election, Bitcoin’s price had risen 1,000% while Ethereum had risen more than 2,000%.
After the 2020 election, Bitcoin had risen nearly 400% within a year while Ethereum had risen more than 1,000%.
Based on the two previous elections, Ethereum looks a solid bet for long-term growth.
Not Much Data
However, this year’s lackluster post-halving prices show that two or three historical events are not enough to form a reliable trend. Bitcoin had seen three halving events before 2024.
The first halving took place when there was still relatively little interest in Bitcoin, but in 2016 and 2020, prices rose 51% and 83% in 6 months. This time around prices were roughly equal to where they were when mining rewards were halved.
The Candidates
While it would be foolish to base investment decisions on historical performance following only two previous occurrences, there are reasons to be optimistic about the market as a whole.
Donald Trump’s Crypto Stance
Despite previously holding a firm anti-Bitcoin stance, calling it a “scam against the dollar”, multi-million-dollar handouts from major crypto names led former President Donald Trump to reverse his position.
He slammed Biden for his anti-crypto position and encouraged cryptocurrency investors to back him instead. He now holds more than $3 million in cryptocurrency, although a lot of this has been donated to him by others.
The Trump family has established its own crypto project and NFT collection. The Presidential wannabe has described Bitcoin as “the future” and has become unlikely bedmates with Elon Musk, the former Dogecoin shiller and crypto enthusiast.
Trump, who currently leads polls, hasn’t set out any specific details for regulating crypto if he was to be elected, other than to say he wants to make the US the crypto capital of the world. However, there is nothing to say he won’t make another major u-turn on the digital currency if he is elected.
For now, though, analysts predict that Bitcoin will reach a high of $125,000 if Trump does win the election.
Kamala Harris And Cryptocurrency
Those same analysts are less optimistic about Bitcoin’s future if Kamala Harris gets elected, giving a prediction of just $75,000.
She certainly hasn’t been as enthusiastic about cryptocurrency as her rival. In fact, she was quite tight-lipped on the topic until September, when she said that she would look to regulate and progress the industry while ensuring members of the public had robust protection.
This may mean that recently discussed stablecoin regulations would see progress, while coins like Ripple, which are already used by some global financial institutions, would be the most likely to see gains.
Bitcoin Performance
Support from both presidential hopefuls has coincided, or possibly helped, with Bitcoin’s price seeing positive movements as the election approaches.
It is currently trading at around $72,000 having confidently pushed through $70,000 resistance earlier in the week. It posted a recent high of just over $73,500 before settling in at around $72,000. BTC doesn’t have far to go to reach its all-time high of $73,797.78, set in March this year.
Experts have said that a dip back below $70,000 could put considerable buying pressure on the coin and that a pre-election burst could well see it pass that mark before potentially rising even further.
Coins Worth Consideration
Bitcoin is the world’s largest cryptocurrency and it represents most people’s first foray into the cryptocurrency market. Therefore, as more and more people enter the market, it is Bitcoin that will likely see the biggest gains.
Ether has genuine utility, as it is used to pay gas fees by companies that set up decentralized apps and smart contracts on the Ethereum network, and this helps underpin its value. It is also the second biggest crypto, which gives it a degree of resilience to wild price fluctuations.
Beyond that, Solana has been proving popular with meme coins and tokens, Dogecoin continues to defy all external expectations, and Ripple’s connections to major banks mean that it is well-positioned to benefit if governments do regulate the crypto industry.
There are also some interesting presales and ICOs entering the market. Pepe Unchained is a layer 2 blockchain that aims to improve the Pepe network, and it has already amassed more than $23 million during its presale.
While the election may lead to price increases and possible regulation of the crypto industry, there is no guarantee. But, there is cause to be hopeful. And there are plenty of cryptocurrencies, many of which have a bright future that could be further sparked following the election results.