How the 2024 US presidential election could impact the crypto industry | Opinion

The outcome of the 2024 US presidential election, with Donald Trump and Kamala Harris as the main contenders, has significant implications for the crypto industry. Each candidate’s policies could shape the future of crypto assets like Bitcoin (BTC).

Here’s a look at how the potential outcomes could impact the crypto industry.

Trump’s approach: lower regulations, higher risks?

Donald Trump, known for his business-first mindset, might be expected to take a hands-off approach to crypto regulations. Trump has been openly skeptical of cryptocurrencies in the past, once calling BTC a “scam.” 

However, his main focus is on promoting American business and economic freedom. If he wins, Trump could push for a deregulated environment where businesses would have more freedom, including crypto companies. 

Here’s what that could mean:

• Lighter regulatory approach: Trump might favour fewer rules for crypto businesses, allowing them to operate with more freedom. This would be appealing to investors and could attract new companies to the U.S.

• Higher volatility: While deregulation could encourage growth, it could also lead to instability in the industry. Fewer regulations could result in more scams or failed projects, causing price fluctuations. Without clear guidelines, some investors may hesitate, fearing potential risks.

• Growth potential: With less red tape, the crypto market might grow faster as more businesses and investors join. If the economy is strong under Trump, the increased wealth and confidence could bring more people into crypto, potentially driving up prices.

In short, a Trump victory might mean fewer regulations but could create a higher-risk environment, leading to more ups and downs in crypto prices.

Read also: Cryptocurrencies: Catalysts for Global Economic Development and Financial Inclusion

Harris’ approach: regulation and stability?

Kamala Harris, the current Vice President, is part of the Democratic administration, which has generally shown more interest in regulating the cryptocurrency space. While she hasn’t publicly discussed crypto in-depth, her administration might follow the current path of balancing innovation with safety. 

If Harris wins, we could see:

• Stricter regulations: A Harris administration might set specific rules for cryptocurrencies to protect consumers from fraud and risky investments. This would give investors more confidence in the market and could reduce the chance of major market crashes.

• Greater institutional involvement: Big companies and banks often prefer stable, regulated markets. Clearer rules could encourage them to invest more heavily in crypto, potentially pushing prices higher.

• More oversight on stablecoins: One area likely to see focus is ‘stablecoins’—digital assets that try to match the value of traditional currencies. The government wants to ensure these assets are safe, as they can be widely used for transactions. Harris’s administration might prioritize regulating stablecoins to ensure they don’t pose a risk to the wider financial system.

If Harris wins, the industry might become more stable due to regulations, possibly attracting long-term investors and reducing price volatility.

Read also: Thailand’s Siam Commercial Bank Launches Stablecoin Remittance Services

Impact on crypto prices: Short-term vs. long-term

Regardless of the winner, the initial reaction from the market might be uncertain, with prices potentially going up or down as investors gauge the new administration’s policies. But in the long run, each candidate’s approach would have distinct effects:

1. Trump victory: Expect short-term volatility. The market may attract investors seeking high rewards, leading to fast price movements. The industry may grow rapidly but face more crypto scams or instability without regulation.

2. Harris Victory: Likely a more stable growth curve. Investors may feel more secure with regulations in place, attracting institutions like banks and asset managers. Prices could rise more steadily as traditional investors feel confident entering the market.

Both roads lead to growth in the crypto industry, but differently.

Either Trump’s or Harris’ win could positively impact the crypto industry in different ways. Trump’s path may bring quicker, riskier growth, attracting more startups and tech enthusiasts. On the other hand, Harris’ route might create a more regulated, stable environment, appealing to traditional and institutional investors. Overall, each approach has pros and cons, but both might ultimately push cryptocurrencies further into the mainstream.

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