As US citizens cast their votes today, is crypto rooting for anyone?

The 2024 US presidential election is well underway, with the first results estimated just several hours from now early morning GMT time. The event is often watched with great interest all over the world and many in the crypto industry have been speculating about how the outcome will shape the future of digital assets and blockchain technology.

Donald Trump makes an easy "pro-crypto" candidate with his public opinion on crypto generally positive -- the former President even launched his own collectible non-fungible tokens (NFTs) years ago. But this doesn't necessarily make Vice President Kamala Harris the "anti-crypto" candidate -- her recent rallies have seen her supporting the advancement of digital assets and blockchain in the US, albeit with an emphasis on consumer protection.

This article delves into the recent news, potential regulatory developments, and media coverage leading up to the election, and explores the possible scenarios for the future of crypto under each candidate.

The news and market impact

In the months leading up to the election, the cryptocurrency market has experienced significant volatility. Bitcoin, for instance, flirted with all-time highs as speculation about a pro-crypto Trump presidency gained momentum amid polling results that suggested Trump was the bookie favourite.

The market's reaction just last week, however, underscores the importance of political outcomes on investor sentiment and market dynamics. When the Federal Open Market Committee (FOMC) meeting seemed to suggest potential interest rate cuts, Bitcoin quickly shed about 5 per cent of its price and continues to trade on election day below USD 70,000.

Potential regulatory developments

The regulatory landscape for cryptocurrency was always poised for significant changes -- but what these changes might be hinge on the election outcome. Under a Trump presidency, we might see a wave of deregulation aimed at fostering growth and investment in the crypto sector. His campaign has emphasised reducing regulatory pressure and promoting the US as a global leader in cryptocurrency. This approach could catalyse institutional adoption and create better opportunities for investors.

In contrast, Kamala Harris has advocated for a more cautious approach, insisting on stronger consumer protection and regulatory clarity. Her administration would likely focus on creating a well-structured regulatory framework that balances innovation with the need for investor protection. While this may initially lead to more stringent regulations, it should later provide a clearer path for the industry's growth, easing the door open even further for conservative investors.

Media coverage of the election has highlighted the contrasting approaches of the two candidates towards cryptocurrency. Trump's pivot from dismissive crypto sceptic to raucous proponent has been overtly covered in crypto media, touting his campaign's acceptance of crypto donations and his public endorsements of Bitcoin. The crypto community has latched on to this, possibly inflating its actual significance as a differentiator for Trumps presidency.

On the other hand, Harris's more conservative stance has been framed as a balanced approach to innovation and regulation. Her emphasis on consumer protection and economic inclusion has resonated with a segment of the population that values regulatory oversight -- this could actually prove to be more beneficial in the long term for an industry marred by scandal and fraud in 2023. Traditional media has portrayed her as a candidate who understands the complexities of the crypto market and is committed to ensuring its sustainable growth.

Future scenarios: Trump vs Harris

A Trump victory could usher in a period of deregulation and rapid growth for the crypto industry in the US. His administration's pro-crypto stance might attract more institutional investors and encourage the development of new crypto projects, or the reboot of many stalled ones. Perhaps crypto mining would expand further in the US, especially if the potential removal of SEC Chair Gary Gensler, who has been viewed as obstructive to the industry's growth, proves to further ease regulatory pressures.

We have, however, witnessed the drawbacks of this approach within and outside the US in 2023: unchecked growth for a new industry invites increased market volatility, opportunist bad actors, and more risk exposure for the retail investor.

A Harris presidency would likely bring a more measured approach to crypto regulation. Her focus on consumer protection and regulatory clarity could provide a stable environment for the industry's growth -- if it can overcome the red tape of US bureaucracy. The US could take a hit to innovation and see even more emerging tech companies take flight. But if the US can stem the brain drain, it might enjoy a period of economic inclusion without the risks associated with unregulated markets. Long term, this could drive broader adoption of digital assets among underrepresented communities in the US.

What won't change

Regardless of who wins the election, certain aspects of the crypto landscape are likely to remain unchanged. The growing interest in digital assets and blockchain technology will continue to drive innovation and investment. The need for regulatory clarity and consumer protection will remain a priority, as both candidates recognise the importance of a well-regulated market. Additionally, the global nature of the crypto market means that US policies will continue to influence international regulatory developments and market dynamics.

The 2024 US presidential election holds significant implications for the future of cryptocurrency and blockchain technology. Whether Trump or Harris takes office, the crypto community will have to cross the same bridges and jump the same hurdles it already saw on the horizon. The complex regulatory landscape of crypto has always needed to adapt to evolving politics, and crypto users, technologists, and industry leaders will seize the opportunities as they present themselves.