Despite the increasingly partisan mood in the cryptocurrency industry Bitcoin will thrive in the long term regardless of who wins the US presidential election in November.
It's a view many crypto investors are increasingly accepting as the wave of optimism sparked by former President Donald Trump's pro-crypto overtures this summer begins to fade.
“Do I think we’ll be in six figures by 2025? Almost certainly. Do I think we'll be in six figures regardless of who wins? Almost certainly,” said Steven Lubka, head of private clients and family offices at Schwan Bitcoin.
“Bitcoin has always been an investment that is more firmly anchored in the fiscal and monetary profile of countries, states and the United States,” Lubka added. “None of the candidates are changing that.”
Fears that a Kamala Harris presidency would somehow limit or lower the price of bitcoin are overblown, said James Davies, co-founder of crypto trading platform Crypto Valley Exchange. Crypto startups may face greater challenges, but the industry will continue to push forward and thrive, he noted. It helps that Bitcoin has become more institutionalized than ever before this year with the launch of Bitcoin exchange-traded funds in the US.
“Some of our communities … have become echo chambers, convinced that if one side or the other wins, the sky will fall,” Davies said. “The truth is that the market is robust, not focused on the U.S. and has not reacted negatively to major events on either side” of the partisan divide.
“This is about options 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, ally with both sides, and succeed regardless of the election. If we want to build a large ecosystem, we can’t afford to be partisan.”
Excessive risk
Lubka agreed that some observers are “overstating the risks of a Harris presidency” because the industry experienced hostilities during the Biden administration. However, he added, “All the signs we are seeing from Harris represent a continued de-escalation” of Biden-era crypto rhetoric.
“The election results will have minimal impact on Bitcoin’s performance over the next 12 to 18 months,” said Tyrone Ross, founder and president of registered investment advisor 401 Financial. “There are still many firms operating through ETF access, interest rate cuts are imminent and retail trading at central depository banks is at a low point.” [It] It will certainly be more difficult for young start-ups, but as an evolving institutional quality asset it will continue to prove itself no matter who is in office.”
Bitcoin traded between $55,000 and $70,000 for most of 2024 after hitting its all-time high of over $73,000 in March. Investors generally expect the price to remain in this lull until U.S. voters decide the next president. However, election news has recently had less impact on Bitcoin price, which is more influenced by macroeconomic developments.
After Tuesday night's debate between Harris and Trump, Bitcoin fell about 3%, although investors attributed this to interest rate updates in Japan and some positioning related to U.S. inflation data for August released early Wednesday.
Growing partisan sentiment
There has been speculation in recent months that the election would serve as an immediate catalyst for Bitcoin – with many citing a potential second Trump presidency as a boon for the industry. For example, the former president gave a speech at the annual Bitcoin conference in Nashville at the end of July and ensured that this note was made a priority in the Republican Party's platform. Analysts at Bernstein said this week that investing in a possible Trump presidency could come via Bitcoin, adding that the cryptocurrency could break out to a new all-time high of around $80,000 if it wins on November 5. However, a Harris victory could push Bitcoin toward $40,000, Bernstein said.
“If Trump wins in November, will there be an immediate rebound? Yes definitely. If Harris wins, could there be immediate selling pressure? That certainly wouldn't surprise me. But in the medium term, I don’t think that’s the dynamic,” said Swan Bitcoin’s Lubka.
Vice President Harris has not expressed a public opinion on crypto, but parts of the industry fear she is anti-crypto, sharing views likely held by Sen. Elizabeth Warren (D-Mass.) and Securities and Exchange Commission Chairman Gary Gensler are crypto introduction.
“There were no clear statements, but there was a bad history under the Biden administration … so I understand why people are paying attention,” Lubka said.
Although there are concerns due to the Biden administration's stance on Bitcoin, “I want to remind investors… that Bitcoin has performed great under the current administration,” Lubka added. It “was one of the most successful assets in the world at a time when everyone was against it. Governments have traditionally been at least mildly hostile to Bitcoin throughout its history, and that has turned out very well.”
Since 2012, Bitcoin has been the best-performing asset for all but three years.