Despite the increasingly partisan sentiment in the cryptocurrency industry, bitcoin will thrive over the long term regardless of who wins the U.S. presidential election in November.
That’s a view many crypto investors are coming to accept, as the wave of optimism spurred by former President Donald Trump’s pro-crypto overtures this summer starts to recede.
“Do I think we’ll be in the six figures by 2025? Almost certainly. Do I think we’ll be in the six figures regardless of who wins? Almost certainly,” said Steven Lubka, head of private clients and family offices at Swan Bitcoin.
“Bitcoin has always been an investment that is rooted more in the fiscal and monetary profile of countries, sovereigns and the United States,” Lubka added. “Neither candidate changes that.”
Fears that a Kamala Harris presidency would somehow limit the price of bitcoin or drive it lower are overblown, said James Davies, co-founder at crypto trading platform Crypto Valley Exchange. Crypto startups may be more challenged, but the industry will continue to fight its way forward and thrive, he noted. It helps that bitcoin became more institutionalized than ever this year with the introduction of U.S. bitcoin exchange traded funds.
“Some of our communities … have become echo chambers and are convinced the sky will fall if one side or the other wins,” Davies said. “The truth is that the market is robust, not centered on the U.S., and hasn’t reacted negatively to major events from either side” of the partisan divide.
“This is about opportunities and regulation for U.S.-based users, not[the] price of a global commodity,” he added. “Crypto needs to learn from traditional finance, it needs to lobby both sides, align with both sides and succeed regardless of the election. If we want to build a big eco-system, we cannot afford to be partisan.”
Exaggerated risk
Lubka agreed that some observers “overplay the risks of a Harris presidency” because of the hostility the industry experienced during the Biden administration. That said, he added, “all of the signposts that we’re seeing with Harris continually represent a de-escalation” of the Biden-era crypto rhetoric.
“The election results will have minimal effects on how bitcoin performs over the next 12 to18 months,” said Tyrone Ross, founder and president of registered investment advisor 401 Financial. “There’s still a lot of firms working through ETF access, there’s rate cuts coming and trading by retail at the centralized custodians are at their lows. [It] definitely will be harder for young startups, but as a developing institutional grade, quality asset it will continue to prove itself no matter who is in office.”
Bitcoin has traded between $55,000 and $70,000 for most of 2024, after reaching its all-time high above $73,000 in March. Investors have widely expected the price to continue in this lull until U.S. voters decide the next president. Election news, however, has lately had less of an impact on bitcoin’s price, which is more influenced by macroeconomic developments.
After the debate on Tuesday night between Harris and Trump, bitcoin fell about 3%, although investors attributed that to interest rate updates in Japan and some positioning around U.S. inflation data for August that was released early Wednesday.
Growing partisan sentiment
In recent months, it had been speculated that the election would serve as an immediate catalyst for bitcoin – with many characterizing a potential second Trump presidency as a boon for the industry. The former president, for example, addressed the annual Bitcoin Conference in late July in Nashville, and ensured a reference was made a priority in the Republican Party Platform. This week, analysts at Bernstein said the way to invest in a potential Trump presidency is through bitcoin, adding that that if he wins on Nov. 5, the cryptocurrency could break to a new all-time high around $80,000. A Harris victory, however, could push bitcoin toward $40,000, Bernstein said.
“If Trump wins in November, will there be an immediate pump? Yes, absolutely. If Harris wins, could there be some immediate sell pressure? That certainly wouldn’t surprise me. But over the medium term, I don’t think that’s the dynamic,” said Lubka of Swan Bitcoin.
Vice President Harris has not shared a public view on crypto but parts of the industry are concerned she’s antagonistic to crypto and shares views of Senator Elizabeth Warren (D-Mass.) and Securities and Exchange Commission Chair Gary Gensler that are thought to be holding back crypto adoption.
“There hasn’t been clear statements, but there has been a bad history under the Biden administration … so I understand why people are paying attention,” Lubka said.
Although there are concerns thanks to the Biden administration’s position on bitcoin, “I would remind investors … that bitcoin did great,” under the current adminustration, Lubka added. It “has been one of the most successful assets in the world during a period where everyone was opposed to it. Governments have traditionally been at least mildly hostile to bitcoin during its whole history, and it’s done extremely well.”
Bitcoin has been the top performing asset in all but three years since 2012.
Daniel Cawrey, chief strategy officer at crypto wallet operator Tonkeeper, said there will likely be a short-term rally or muted market reaction depending on the eventual winner in November but that, either way, crypto is already better off this election season.
“This election has brought the crypto conversation to the forefront … Biden has pretty much ignored the industry,” Cawrey said. “Unlike Biden, however, Harris has not been taking a hands-off approach to crypto since elevating to be the Democratic nominee. Her campaign has been talking with stakeholders in the industry, which could mean better guidelines, which the industry needs.”