With the 2024 US Presidential elections fast approaching, the political landscape is heating up with a compelling contest between Donald Trump and Kamala Harris. Investors worldwide are keenly observing how these political dynamics might influence both stock and cryptocurrency markets. The anticipation of this electoral outcome is palpable, with significant implications expected for the nation’s economy and financial markets.
How Does Crypto Play a Key Role in the 2024 US Elections?
The 2024 election cycle is groundbreaking as it places cryptocurrency at the forefront of political discourse in the United States. This development highlights the increasing significance of digital assets in the realm of politics. Both candidates have articulated their stances on cryptocurrencies, marking a pivotal moment for the global crypto and blockchain sectors.
It’s noteworthy that nearly half of the corporate contributions to this election have emanated from the crypto industry, underscoring the sector’s demand for regulatory transparency. As the election day approaches, the spotlight is on how each candidate’s policies might reshape the digital asset ecosystem. Donald Trump has emerged as a strong advocate for crypto, while Kamala Harris supports digital innovation but emphasizes consumer and investor protection.
Impact of Recent Political Developments
The 2024 US Presidential elections have injected volatility into the crypto markets. Despite other influencing factors, such as rising institutional interest and changes in Federal Reserve policies, the elections remain a significant force impacting the bullish crypto environment.
Standard Chartered predicts that Bitcoin might reach $73,000 by election day and potentially surpass $80,000 should Trump secure victory. Analysts suggest that a Trump win could positively affect sectors like Indian auto, energy, and metals, while being neutral for pharmaceuticals. The Indian IT sector, vital due to US demand, anticipates potential benefits from a Republican win, influenced by Trump’s previous restrictive stance on the H-1B visa program.
What Will Happen to Bitcoin if Trump Wins?
Donald Trump has branded himself as a “crypto candidate,” integrating digital currencies into his campaign strategy. Notably, he began accepting campaign donations in various cryptocurrencies, including Bitcoin, Ether, Dogecoin, and Solana, among others.
Trump’s vow to dismiss SEC Chair Gary Gensler on his first day in office resonates with crypto enthusiasts, given Gensler’s often unpopular policies within the crypto community. Additionally, Trump has proposed establishing a national Bitcoin reserve, further igniting excitement among crypto advocates.
Donald Trump’s Priorities If Elected
If Trump emerges victorious, his presidency is expected to create significant shifts in both domestic and foreign policies. Countries such as Israel, Russia, Saudi Arabia, India, Australia, and Japan might benefit from his policies, whereas China, Iran, Mexico, and Ukraine could face adverse impacts.
Trump has pledged to combat inflation and enhance affordability in America, though economists caution that his proposed higher import taxes could inflate prices. His fiscal agenda includes substantial tax cuts, extending the 2017 reductions that primarily benefited the wealthy. Additionally, Trump promises to complete border wall construction and increase enforcement, diverging from Harris’s stance on a bipartisan immigration bill.
Moreover, Trump has prioritized tariffs, proposing new 10-20% tariffs on most foreign goods, with higher rates for Chinese imports. He aims to incentivize domestic manufacturing by offering lower corporate tax rates.
How Would Bitcoin React to a Kamala Harris Win?
Kamala Harris has recently begun addressing cryptocurrency, advocating for stronger regulatory oversight to ensure consumer protection and financial stability. A Harris victory could initially cause a dip in leading cryptocurrencies’ prices, followed by potential recovery.
Under a Harris administration, stricter regulatory scrutinies could be anticipated, particularly concerning private capital and crypto markets. Analysts predict a more accommodating stance from the U.S. Federal Reserve, potentially prompting the Reserve Bank of India to ease rates domestically. This could benefit Indian non-banking financial companies (NBFCs) by reducing funding costs and stimulating loan demand.
According to Rabobank International analysts, Harris’s policies might contribute to continued inflation decline, aligning with the Fed’s 2 percent target, allowing for further rate cuts in 2025.
Harris’ Priorities If Elected
Harris has outlined her priorities, focusing on reducing food and housing costs for working families. Her experience as a prosecutor in California informs her commitment to combating human trafficking. If elected, she aims to ensure the US emerges victorious in the 21st-century global competition against China.
Harris, a proponent of a two-state solution between Israelis and Palestinians, advocates ending the Gaza conflict. She criticizes Trump’s tariff plans as a national tax on working families, potentially costing each household $4,000 annually. Harris proposes a more targeted approach to taxing imports, maintaining tariffs on some Chinese imports, including electric vehicles, introduced during the Biden-Harris administration.
Tax Rates
Bank of America projects that Trump’s plan to reduce the corporate tax rate to 15% from 21% could boost corporate earnings by 4%. The impact on each sector depends on their sensitivity to tax rate changes. Conversely, Harris’s proposal to raise the corporate tax rate to 28% from 21% might negatively affect sectors, though homebuilder and renewable energy stocks could benefit from her policies promoting housing development and sustainable energy.
Despite these changes, Bank of America maintains that as long as corporate profits grow, the stock market will rise regardless of the election outcome.
Bond Market
The US bond market’s performance largely depends on interest rate directions. A Trump victory is anticipated to bring higher interest rates, potentially lowering bond prices. In contrast, a Harris win might result in falling interest rates, favoring bonds, as her policies wouldn’t fuel inflation through tariffs or deportations.
Who Has Garnered More Support?
Notably, both US and Indian equities have rallied during Trump’s first term and Joe Biden’s presidency. According to Bloomberg data, the S&P 500 and NASDAQ indices saw significant gains under both administrations. Currently, Polymarket indicates Trump’s odds of winning at 59.5%, while Harris stands at 40.5%.
While Trump enjoys broad support from the crypto community, including endorsements from prominent crypto figures and major exchange executives, Kamala Harris has also garnered support from notable crypto industry leaders. Ripple co-founder Chris Larsen endorsed Harris in early September.
Conclusion
The outcome of the 2024 US Presidential elections will undoubtedly influence global crypto policies. Both Trump and Harris recognize the importance of digital assets, signifying a bipartisan acknowledgment of crypto’s role in the economy. The focus now shifts to how the US will regulate crypto to maintain its leadership in the digital economy.
Despite the election results, industry experts assert that the crypto sector’s growth is inevitable. Coinbase CEO Brian Armstrong posits that the incoming US administration will adopt a constructive stance on crypto, irrespective of the victorious party.
Investors are advised to exercise caution and minimize risks by observing market trends without reacting impulsively to news, as volatility looms on the horizon.
