Trump and Harris' dispute affects the crypto market

Author: Climber, Golden Finance

The crypto market is increasingly affected by the US election. From the accelerated approval of Ethereum spot ETFs to the recent divergence of crypto prices from the US stock market, it is clear that the direction of the new US presidential candidate has become more and more of a bellwether for crypto investors.

Since Polymarket predicted that Harris's chances of being elected exceeded Trump's for the first time, the crypto market has been falling continuously. As of writing, BTC has dropped from $62,000 to $56,000. The main reason behind this is that Harris has not yet made clear her personal attitude towards crypto since her nomination, and as the successor to the Biden camp, she is likely to continue the former's strict regulatory policies.

As political opponents, Trump and Harris often have different opinions, and personal wishes will give way to votes under the pressure of the election. For example, Trump did not trust cryptocurrencies before, but now he is supporting Bitcoin in a high-profile manner. On the other hand, Harris is currently ahead of Trump in three key states, five swing states and even Polymarket in the United States, and she did not attend the "Crypto4Harris" event. Therefore, Harris may hold opinions against the policies that Trump wants to support.

The market fell and quit the circle frequently under the fog of the election

Affected by the rise in support after Trump's assassination on July 13, the crypto market ushered in a wave of increases, and BTC rose from about $57,500 to $68,500. In particular, Trump's speech at the Bitcoin Conference made BTC return to the $70,000 range.

After Biden withdrew from the election on July 22, he nominated Harris as the Democratic presidential candidate in 2024. The latter's poll support rate continued to rise and surpassed Trump at the end of July. In addition, the US government transferred $2 billion worth of BTC, leading analysts to speculate that the Biden administration will sell all Bitcoin before Trump takes office. At that time, coupled with the impact of Japan's interest rate hike, the crypto market ushered in a sharp drop, and BTC fell from US$70,000 to US$49,000.

On August 8, the US Democratic Party launched the "Harris's Cryptocurrency" campaign, and the crypto market rebounded simultaneously, with BTC rising by more than 10% throughout the day. However, Harris was revealed to have not attended a crypto roundtable meeting later that day, and as Polymarket predicted that his probability of being elected was equal to Trump and then significantly surpassed him, the crypto market once again ushered in a volatile decline.

Especially when market news broke that Harris was ahead of Trump in three key states and five swing states, the decline of BTC was the most obvious. At present, there are media reports that Harris missed the "Crypto4Harris" online meeting organized by Democratic cryptocurrency supporters on August 15, and Harris's digital advertising expenditure exceeded Trump by ten times.

On the other hand, the U.S. stock market has been rising continuously since August 8, with the Dow Jones Industrial Average at 40,500 points and the Nasdaq at nearly 17,600 points.

For the above impact, brokerage firm Bernstein said in a research report that if Trump wins the U.S. election, it will be good for the crypto market, while Harris's victory will be bad. At the same time, the report also pointed out that Bitcoin weakened after Polymarket odds and polls turned to support Harris.

Harris's unclear attitude towards encryption also made investors worry about potential risks. Even on Trump's side, some institutions said that they might not really take action.

Circle CEO Jeremy Allaire said that cryptocurrency is already a common concern of both parties, but more action is needed to consolidate this position. In addition, he doubted the possibility of Trump committing to these ideas.

The competition between Trump and Harris has also indirectly made the crypto market turbulent, with large contracts liquidated many times in the market. On August 16, the total liquidation amount exceeded 200 million US dollars, on August 9, the total liquidation amount exceeded 200 million US dollars, and on August 5, the total liquidation amount exceeded 1 billion US dollars...

The continuous decline in the market has also caused many blue-chip altcoins to wipe out the gains in the past year, which has also made many OGs begin to doubt the correctness of entering the Web3 industry and have plans to withdraw from the circle.

Xiao Erduo, a well-known crypto KOL, said that he has a strong trust crisis in the currency circle and has sold the principal and cleared all the coins except Bitcoin.

Well-known trader Ansem also said that the recent trading performance was extremely poor and he was seriously considering quitting the circle permanently.

Harris' attitude is unresolved, and political disputes hide investment risks

Looking back at the recent decline in the crypto market, the reason is inseparable from Harris's increased probability of being elected and his unclear attitude towards the crypto market.

Previously, there were reports that Harris' campaign team was seeking to restart contact with Bitcoin and crypto teams, such as Coinbase, Circle and other crypto companies. However, the team said that re-establishing contact with the crypto industry was not for the purpose of donations, but to pave the way for reasonable supervision.

As for Harris himself, Harris did not attend any conferences related to crypto topics, such as the Bitcoin Conference, the Crypto Roundtable, and the "Crypto4Harris" online conference.

In addition, Harris has not yet publicly committed to supporting the cryptocurrency industry, and is likely to continue the Biden administration's strict regulatory policy on cryptocurrencies.

Galaxy Research Research Director Alex Thorn once analyzed that Harris worked closely with key anti-cryptocurrency officials such as Brian Deese and Bharat Ramamurti. Deese once published an article on the White House website emphasizing the risks of cryptocurrencies, while Ramamurti is considered the White House's top cryptocurrency critic. Their participation suggests that the Harris administration is unlikely to soften its stance on cryptocurrency policy and will continue to support strict regulatory measures to protect the safety of consumers and the financial system.

Harris' running mate Waltz explicitly advocated stricter regulation of cryptocurrencies, and not long ago even returned a $4,000 political donation from a former FTX executive.

On August 10, the Federal Reserve's enforcement of Customers Bancorp also made the community question Harris' sincerity in trying to repair relations with the crypto industry.

There are signs that Harris is not eager to show goodwill to the crypto market, and Harris is ahead of Trump before he makes a statement on the crypto market. Unless necessary, Harris may not be in urgent need of funds and voter support from the crypto field.

In terms of fundraising funds, the Trump campaign announced that it raised $138.7 million in July, but Harris raised $200 million in the first week of her campaign. The Trump team pointed out that as of August, their cash reserves were $327 million, which put them under certain financial pressure considering that there are only three months left before the election.

On the other hand, as political enemies, Trump and Harris often attack each other and have different political propositions. For example, on August 10, Harris said that the Fed's actions should be independent of the president. But Trump previously said that if elected, he would seek to influence US monetary policy.

That is to say, in terms of attitude towards cryptocurrencies, Harris is entirely likely to sing a different tune from Trump and continue to strengthen the supervision of the crypto market. This is exactly the potential risk that many institutions and ordinary investors are worried about.

At this stage, the fight between Trump and Harris has indeed increased the uncertainty of the crypto market. But the good news is that there are more and more topics and news about "Harris crypto-friendly", especially some crypto-friendly rumors or actions of both of them have leaked.

Harris:

On August 15, Circle CEO said that Harris' campaign team is actively engaging with the crypto industry and mentioned that Harris' campaign representatives participated in the previous crypto roundtable meeting.

On August 8, the Democratic Party of the United States launched the "Crypto for Harris" campaign. The campaign aims to attract 40 million American voters who own digital assets and show the Democratic Party's position on promoting the blockchain and cryptocurrency industry.

On August 1, Harris' team was exposed to contact people from crypto companies such as Coinbase, Circle and Ripple Labs to ease the tension between the Democratic Party and the crypto industry.

It is also reported that Harris' husband is also a "cryptocurrency enthusiast".

Trump's side:

Trump has criticized cryptocurrencies many times during his term, saying that they are "not money", based on "castles in the air" and "may promote illegal behavior", and believes that Bitcoin is a "scam". But during this year's US presidential campaign, his attitude changed 180 degrees.

Trump's representative declarations and promises to the crypto market include: if re-elected, he will replace Gary Gensler, chairman of the Securities and Exchange Commission (SEC) who is critical of cryptocurrencies, and if elected, the government will retain 100% of its Bitcoin and keep the United States at the forefront of the cryptocurrency field.

Trump's official store supports Bitcoin payments, including shoes and perfumes.

In addition, Donald Trump Jr., Trump's eldest son, once said that Bitcoin is a means of hedging against inflation and authoritarian governments, and recently announced the opening of the Telegram channel "The DeFiant Ones", and he will also launch a crypto project.

Trump's second son Eric Trump said that he will soon launch a crypto project related to "digital real estate", and he once posted that he really fell in love with cryptocurrency/DeFi.

Conclusion

At this stage, the competition for the US presidency is becoming increasingly fierce, and the upcoming debate between Trump and Harris has made the prospects of the crypto market even more obscure. In particular, Harris has never expressed his position on the crypto market, which has made many investors choose to wait and see. Once crypto regulation becomes stricter, the risks will obviously outweigh the opportunities for the already volatile crypto market.