The rising political interest in Bitcoin is reshaping the landscape of the 2024 U.S. presidential election. This has seen influential figures like the Winklevoss twins and Kraken’s Jesse Powell pouring millions into political donations, fueling a debate within the crypto community. In fact, the cryptocurrency industry has spent more on the 2024 US elections than both the entire energy sector and the entire health sector.
Source: OpenSecrets
The industry’s surprise at Trump’s sudden support for Bitcoin during the last Bitcoin Conference reflects a broader trend: Bitcoin and other cryptocurrencies are no longer just financial tools but key topics in political discussions.
The crypto community, especially on platforms like crypto X, is divided. Some openly back Trump, viewing his support for Bitcoin as beneficial for the industry, while others feel pressured to support him due to perceived hostility from the Democratic administration towards crypto.
Arthur Hayes is one of the big figures voicing his concerns, suggesting that Trump’s support for crypto isn’t genuine. He believes it’s just a strategy to attract donations and that Trump will forget about crypto once elected.
In today’s article, we’ll delve into the topic and explore various outcomes for Bitcoin based on different scenarios during and after the elections.
General Opinion: Trump is Good for Crypto
As the election approaches, several candidates have taken clear stances on Bitcoin, indicating a major shift in how digital assets are viewed. Robert Kennedy Jr., Vivek Ramaswamy, and Ron DeSantis have all openly supported Bitcoin, pushing for policies that protect and encourage its use. Recently, Donald Trump has also shown support for Bitcoin, surprising many given his previous scepticism.
This has been well received by the crypto community because:
- Even though his previous term leaned towards protectionist policies, Trump has generally favoured deregulation and market freedom. This suggests his administration would take a less restrictive approach to crypto regulation compared to the Biden administration
- His focus on economic growth and job creation might lead to policies that encourage investment in crypto businesses, fostering a favourable environment for startups and innovation, and boosting economic activities and job opportunities.
- Trump has expressed scepticism towards the development of a CBDC, allowing Bitcoin to dominate the market.
- His administration might adopt a competitive stance against other countries, aiming to ensure that the U.S. remains a leader in financial technology and the global crypto market.
- At the Bitcoin 2024 Conference, Donald Trump demonstrated significant support for the cryptocurrency sector, marking a notable shift from his previous critical stance on Bitcoin.
Source: The New York Times
In contrast, the scenario under the Democratic Party seems less favourable:
- More regulatory frameworks will likely be established, increasing compliance costs for crypto businesses.
- Biden’s/Harris’ administration has shown interest in developing a U.S. CBDC, which could lead to more scrutiny and regulation of existing cryptocurrencies to pave the way for a digital dollar.
- Both Biden and Kamala Harris have emphasised climate change and environmental sustainability, potentially leading to policies targeting the environmental impact of PoW cryptocurrencies like Bitcoin.
- There may be an increased focus on taxing cryptocurrency transactions and stricter reporting requirements for individuals and businesses.
Now, we are not claiming to be political experts here, but this seems to be a fair take on the overall community perception of both candidates’ attitudes towards crypto.
Alternative View: Trump Might Not Be Good for Crypto
At least as good as it initially appears. As mentioned above, Arthur Hayes, a notable figure in the crypto world, recently argued that Trump isn’t genuinely pro-crypto. He believes Trump’s support for crypto is more about gaining votes in key swing states than actual commitment. Hayes thinks Trump, like many politicians, will say anything to get re-elected but won’t necessarily follow through once in office. He also cautions that crypto supporters might be naively trusting Trump’s promises and suggests they should demand concrete pro-crypto legislation before the election.
This is, in our opinion, a very interesting take, as history shows how candidates tend not to follow through with their promises. Now, perhaps Trump is really willing to follow through with his Bitcoin promises, we don’t know. Nevertheless, it’s a perspective we should all be aware of.
Now, here’s another take on why fully depending on Trump for crypto could be a bad idea:
Trump might lose
The current political climate is unpredictable, with numerous polls suggesting different outcomes. In the United States, the polls indicate a probable victory for Trump. However, the trends seen worldwide suggest a dynamic shift in political landscapes.
Source: The Economist
Spain’s General Elections
In Spain, the right-wing Partido Popular (PP) was favoured to win, with pre-election polls suggesting a potential majority with far-right Vox’s support. The PP (blue) won the most votes and secured 136 seats in Congress but fell short of an absolute majority even with Vox’s 33 seats. Contrary to expectations, the left-wing PSOE (red), led by Prime Minister Pedro Sánchez, performed better than anticipated, winning 122 seats. Sánchez successfully negotiated support from smaller parties to continue governing.
Source: ElElectoral
France’s Political Surprise
In France, the far-right National Rally, led by Marine Le Pen, seemed poised for victory. However, in a surprising twist, Le Pen’s party suffered a significant defeat in the second round, failing to even secure second place. This outcome was largely due to left-wing factions uniting to counter the right-wing challenge.
Source: The Guardian
UK’s Labour Party Resurgence
The UK saw a historic shift in its political landscape. The left-wing Labour Party, led by Keir Starmer, achieved a landslide victory in the 2024 general elections, ending 14 years of Conservative rule. Labour secured 412 seats, while the right-wing Conservative Party, led by Rishi Sunak, suffered its worst defeat, winning only 121 seats. This marked a dramatic return to power for Labour with a strong mandate.
Source: CNBC
The recent elections in Spain, France, and the UK illustrate a broader trend of political unpredictability and shifting allegiances. Right-wing campaigns often make a lot of noise, with prominent Trump supporters and wealthy individuals speaking out on various platforms. However, their policies, which often favour the rich, don’t resonate with the average person who is struggling with high living costs, layoffs, and a weakening social welfare system. These everyday individuals may not have the same platforms to voice their concerns, but their votes are just as crucial as those of the wealthy.
This discussion isn’t about taking sides but rather about preparing for unexpected outcomes that could impact markets, particularly Bitcoin.
Considering the unlikely scenario of Trump losing, what would be the impact on Bitcoin and the market if Kamala Harris were to be elected? Well, she has shown some interest in the crypto sector, leading to speculation about her stance on Bitcoin. Recently, there were discussions about her possibly speaking at the Bitcoin Conference 2024. This raised hopes among some in the crypto community that she might be softening her stance towards digital currencies. However, she ultimately decided not to attend or speak at the event. This decision was seen as a missed opportunity to engage with the growing number of crypto enthusiasts and voters. Her stance appears cautious, and while she hasn’t made explicit anti-Bitcoin statements, her decision to not engage directly with the Bitcoin community at such a high-profile event suggests she may not fully embrace the sector yet.
Closing Thoughts
The purpose of this article was to try to provide an unbiased view of the current situation regarding crypto and its political implications, exploring the potential gains and risks for the crypto community in aligning with a particular political party. Questions remain about whether Trump would fulfil his promises if elected and whether associating with him might damage the reputation of cryptocurrencies among the general public. As a community, the best course of action is to ensure Bitcoin and other crypto remain non-partisan, focusing more on advocating for clear crypto regulations before the election, prioritising tangible results over political promises, as Arthur suggested.
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