Possible significant impact of the USA elections on the crypto market

The presidential elections today in the USA could have a significant impact on the crypto sector. 

This is what emerges from a report by HTX published yesterday. 

The report: the relationship between USA elections and impact on the price of crypto

The long report analyzes the interactions between the crypto world and the 2024 U.S. presidential elections.

First of all, it highlights how Bitcoin and cryptocurrencies have become a key theme in this year’s presidential race, due to the fact that crypto supporters represent a voting bloc to be reckoned with in U.S. politics. 

The report analyzes various factors behind the growing importance of Bitcoin and criptovalute in US politics, including the erosion of real wages caused by inflation, the challenges to the global dominance of the dollar, the growing interest of US voters in cryptocurrencies, and the government’s regulatory strategies for the crypto sector.

Additionally, explore the different positions of the presidential candidates regarding the crypto world, and how their attitudes could shape future policies and market expectations. 

The forecasts on the USA elections: what will be the impact on the crypto world?

The HTX report predicts that, in the event of a victory by Donald Trump, the crypto regulatory environment could become clearer and more relaxed, and this would support the incubation and growth of crypto startups.

For example, new spaces could open up for IPOs of crypto companies, and the framework could become more favorable for the entry of traditional investment institutions. The effects on wealth could also increase and improve the financing environment, with DeFi favored in quickly entering the mainstream financial market. 

It should be noted that, according to the latest data, Trump actually seems to be in advantage over Harris, so this could be the most likely scenario, even though Harris has regained some of the disadvantage accumulated in recent months in recent days.

The report, however, does not make precise predictions in the event of a victory by Kamala Harris. 

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HTX Ventures

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The report was drafted by HTX Ventures, the global investment division of HTX.

HTX is the new name of Huobi, a Chinese crypto exchange founded in 2013, and then internationalized after the Chinese ban on crypto. It is now based in Singapore. 

There was a time when Huobi was one of the major crypto exchanges in the world, but the Chinese ban of 2021 had a strong negative impact on its clientele. 

As of today, HTX, with less than two billion in daily spot trading volume, is no longer even among the top 20 in the world for trading volumes. Nevertheless, it still remains one of the top ten in the world for usage. 

It is still a point of reference for the Asian crypto markets, although even in Asia it has now been surpassed in usage by other exchanges. 

Trump vs. Harris: who will be the winner of the USA presidential elections?

The report reminds that both presidential candidates, Donald Trump and Kamala Harris, have leveraged cryptocurrencies in their electoral campaigns in an attempt to gain support within the crypto community. 

Kamala Harris has proven to be more favorable towards cryptocurrencies compared to the current president Biden, but she has only made limited statements about the crypto policies she would adopt if elected. Additionally, she has been very cautious on key issues such as taxation, Bitcoin mining, and self-custody.

Donald Trump, on the other hand, has shown a strong interest in the digital asset industry, going so far as to state that he intends to make the USA the crypto capital of the planet, and the world’s superpower of Bitcoin.

He has also already proposed a series of political ideas on cryptocurrencies, including the creation of a strategic reserve of Bitcoin, the establishment of a presidential advisory council on cryptocurrencies, and the prohibition for the Federal Reserve to issue a digital currency. 

Cryptocurrencies and US Politics

The report also identifies four reasons why cryptocurrencies have come to the forefront of the U.S. political scene.

The first is that cryptocurrencies are becoming increasingly important for the United States. 

In fact, regardless of which of the two candidates will be victorious, it is likely that the deficit and the US debt burdens will worsen, and in this case, Bitcoin can serve as an effective tool for governments and investors to protect themselves from inflation. According to the report, in fact, Bitcoin in particular has a potential strategic significance in the face of debt and inflation pressures. 

The second reason is that stablecoins can help expand the international influence of the US dollar, and this also interests US voters.

The third reason is the reaction of the crypto sector to the strict regulation of the Biden administration, as a more relaxed regulatory framework is now being requested.

The last reason is that crypto companies have become among the main contributors to political donations in 2024. 

Predictive markets

The report also analyzes the so-called “on-chain predictive markets”. 

These are betting platforms that, however, use smart contracts and decentralized ledgers to create transparent global markets, ensuring that they are fair and tamper-proof.

The main one is Polymarket, which guaranteed 80% of the volume generated by crypto bets on the US presidential elections. It has also been adopted by numerous traditional media as a source of alternative news, even surpassing Web2 competitors.