4Alpha Research: Where will encryption go if Harris is elected?

4 Alpha Research Researcher: 0xamuel

On the evening of August 14, Eastern Time, the Democratic Party of the United States held an online town hall meeting called "Crypto 4 Harris" to counter Trump's influence in the cryptocurrency industry and hope to win the support of about 40 million Americans who hold cryptocurrencies for Kamala Harris.

However, the media previously reported that Harris would attend in person and discuss with guests such as entrepreneur Mark Cuban and SkyBridge Capital founder Anthony Scaramucci. This should have been Harris' first positive interaction with the crypto community, but unexpectedly, Harris once again missed the event.

At the meeting, Democratic Senator Chuck Schumer stood up for Harris and promised to enact laws supporting cryptocurrencies if Harris was elected president. However, Harris himself was absent from the meeting, which caused dissatisfaction among a large number of viewers and caused serious doubts about his position.

Nevertheless, as news of the event continues to be released, Harris's chances of becoming the next US president are still rising. According to Polymarket data, before the event was scheduled, Harris's chance of winning was about 40%; after the event was announced on August 8, her chance of winning was tied with Trump for the first time (49%); with the event held on the 14th, Harris's chance of winning further increased to 53% (at the time of writing), while Trump's was 44%.

Meanwhile, the price of Harris's concept meme coin Kamala Horris ($KAMA) is also rising. According to Coingecko data, as of the time of writing, the price of $KAMA has reached $0.0131, up nearly 47% from the low of $0.0089 on August 4. Previously, $KAMA had soared to $0.038 as Biden withdrew from the election. In contrast, Trump's concept currency MAGA ($TRUMP) has fallen more than 60% from its high a month ago.

Harris did not attract much attention as Biden's running mate before Biden made it clear that he would withdraw from the election. Trump initially ignored his rival and publicly emphasized that Harris was very opposed to cryptocurrencies. But now, the situation seems to have changed, and support for Harris is growing in both traditional and crypto markets. So, will Harris really be elected? If she becomes the president of the United States, what impact will it have on the crypto market? And how can Trump break the deadlock and turn the situation around?

Indifferent attitude

Unlike Trump's hostile attitude towards cryptocurrencies when he was the president of the United States, Harris seems to have always maintained an indifferent and conservative attitude towards this emerging field. She has never paid enough attention to cryptocurrencies, and is even seen by the outside world as "not very interested".

First, as the Vice President of the United States, Harris mainly focuses on more traditional macro areas, such as economic recovery, COVID-19 response, environmental issues, and racial equality. Judging from her financial disclosures, Harris and her husband Douglas Emhoff prefer to invest in stable, traditional assets, such as U.S. Treasuries and emerging market stocks. This investment portfolio shows that Harris is particularly cautious in choosing emerging technologies and financial instruments, and she seems to prefer to keep a certain distance from high-risk cryptocurrencies.

Second, although Harris has served as a senator and state attorney general in California and has had contact with Silicon Valley's technology giants, this has not translated into her public support or participation in cryptocurrencies. Even as cryptocurrencies have gained more and more attention in Silicon Valley and the tech industry as a whole, Harris has not expressed clear views on cryptocurrency policy during her tenure in public office, nor has she actively participated in related legislative or regulatory discussions in Congress or other public occasions. This silence further demonstrates her cautious attitude in this area.

Furthermore, even during her tenure as vice president, Harris's position on cryptocurrency has not changed significantly. She has neither participated in or promoted any major cryptocurrency-related policies, nor has she made any official statements in support or opposition of cryptocurrency. In sharp contrast to her active participation in the fields of environment, education, and health care, Harris's "absence" in the field of cryptocurrency is particularly prominent.

Overall, before "officially" running for the next US president, Harris' attitude towards cryptocurrency can be described as quite "indifferent", which may be due to her caution about the risks and uncertainties in this field. Despite a certain connection with the technology industry, her investment and policy choices are clearly more inclined to safety and stability. Compared with Trump, who is a businessman and dares to take risks, Harris is undoubtedly more conservative.

“False transformation”

In order to win the election, Harris seems to have started to make some changes. Her campaign team recently recruited two consultants with cryptocurrency backgrounds: David Plouffe and Gene Sperling. Plouffe was the campaign manager and senior adviser to former US President Obama. After leaving the White House in 2013, he actively got involved in the field of cryptocurrency, and served as a global strategic adviser on the Binance Global Advisory Board and Alchemy Pay. Another person who joined Harris' team, Sperling, served on the board of Ripple and served as an important economic adviser in the Clinton and Obama administrations.

On the surface, these actions seem to be Harris's emphasis on cryptocurrency, and she is working hard to establish connections with the crypto industry. The addition of the two consultants may also provide her with some support and help in winning the election and formulating cryptocurrency policies. However, do these "surface efforts" really reflect her change of attitude? The answer seems to be no.

Previously, there were rumors that Harris would attend and speak at the Bitcoin Conference held at the end of July. As we all know, Trump announced that he would attend the meeting even after being shot, and indeed expressed at the meeting that he would formulate a series of crypto-friendly policies. The crypto market was looking forward to how the two candidates would argue at the meeting. However, the result was disappointing. David Bailey quickly confirmed that Harris would not attend, and in the end she did not attend.

Of course, considering that Harris had just been nominated as a presidential candidate and was busy with affairs, it might be understandable that she failed to attend the conference. But then, in a virtual roundtable organized by California Democratic Congressman Ro Khanna, Harris's absence again aroused widespread doubts in the crypto industry. At the meeting, well-known crypto industry representatives including Ripple executives Brad Garlinghouse and Chris Larsen, and Uniswap CEO Hayden Adams had dialogues with Democratic officials. Harris, as a representative of the Democratic Party, should have attended the meeting. Therefore, Gemini co-founder Tyler Winklevoss publicly questioned the reason why Harris did not attend the meeting on the X platform to express his dissatisfaction.

Perhaps affected by these factors, the dialogue between crypto representatives and Democratic representatives at the roundtable was not smooth. Industry executives failed to reach a consensus with the Democratic Party, but instead harshly criticized government officials. Conway and other large donors expressed strong dissatisfaction with the government's empty promises. This tension shows the differences between the crypto industry and the Democratic government in policy positions, and once again deepens the crypto industry's doubts about Harris: Does she really value cryptocurrency?

Harsh policies may continue

Now, Harris has once again missed important events related to crypto, which has disappointed everyone. However, her approval rating is still rising steadily. As a member of the crypto industry, we have to think: If Harris wins the election, what impact will this have on the cryptocurrency market?

In my previous article "Trump to Biden: The Evolution and Impact of US Cryptocurrency Policy", I mentioned that the Biden administration has taken stricter regulatory and tax transparency measures in the crypto market. Although these measures have reduced market uncertainty to a certain extent, they have also aroused concerns and opposition from the crypto community. As a Democratic candidate, Harris may find it difficult to break this established framework in terms of policy.

Arca Chief Investment Officer Jeff Dorman once pointed out that although Trump's election may be more beneficial to the cryptocurrency market, Harris's victory will not be as bad as some people worry. He also mentioned that heavyweights in the Democratic Party, Nancy Pelosi and Chuck Schumer, have recently supported some bills that are favorable to cryptocurrencies, indicating that the attitude towards cryptocurrencies within the Democratic Party is changing.

However, are these changes enough? Alex Thorn, head of research at Galaxy Research, pointed out on X that since Harris chose two anti-cryptocurrency officials in the Biden administration (Brian Deese and Bharat Ramamurti) to participate in her team, she may continue Biden's hostile policies.

You know, Trump has clearly proposed a plan to use Bitcoin as a strategic reserve, and even considered using Bitcoin to solve the US dollar debt problem. These bold remarks are unmatched by the current Democratic Party. Considering Harris's previous actions and the Democratic Party's long-standing harsh policies, I personally find it hard to believe that she will propose a loose policy. Therefore, I am deeply concerned about the cryptocurrency market after Harris becomes president in the future.

Trump: The market favors it

As mentioned earlier, Trump's advantage lies in his consistent crypto-friendly stance. From releasing multiple series of NFTs, to hosting NFT equity dinners, to risking his life to attend the Bitcoin Conference, Trump's performance is undoubtedly more "sincere" compared to Biden's hasty launch of his own memes to win the favor of the crypto community when he was far behind, and Harris's seemingly gorgeous moves of recruiting crypto teams and conducting meetings.

From the perspective of the crypto market, whether it is the relatively loose policies during Trump's presidency or the recent craze for Trump-related memes, the crypto market is clearly more inclined towards him.

In addition, Trump recently held a Space event with crypto leader Musk at X. Although the entire conversation did not mention Bitcoin or cryptocurrency, Trump's initiative to contact Musk undoubtedly gained another wave of favorability in the crypto circle. This positive move shows that Trump seems to be trying to consolidate his support in the crypto community and show his interest and openness in the field.

Although we can criticize him for these actions and speeches that may be just "painting cakes" to win votes, compared with the long-term harsh policies of the Democratic Party, the crypto market is obviously more willing to accept Trump's "big cake". After all, every time a political event related to Trump is reported, it brings a wave of significant gains to the cryptocurrency market. In the face of visible benefits, perhaps we don't have to expect too much from Harris's policies that are untouchable and illusory.

Written at the end

In general, Harris's attitude towards cryptocurrencies seems to be still groping. Although she has recently taken some measures to try to get closer to the crypto community, her actions and remarks always seem to contradict each other, and her position is still not clear enough. Personally, compared with Trump, it is difficult for me to have enough confidence in Harris at this stage. For the crypto market, whether Harris's lead can really bring benefits still needs time to verify. As the election campaign progresses, it may be a good idea to continue to pay attention to her movements in this field, and perhaps there will be clearer signals.

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