As the 2024 U.S. election race between Donald Trump and Kamala Harris comes to a close, the stakes for the crypto sector are higher than ever. The US presidential election has become a focus point for the cryptocurrency sector, with industry analysts predicting that the outcome would dramatically affect global crypto legislation and market dynamics.

In the United States, major participants in the blockchain and digital asset sectors are keeping a careful eye on how the election can affect regulatory decisions that affect investor mood, market stability, and the direction of cryptocurrencies in the future.

Trump has been progressively more supportive of crypto regulation, whereas Kamala Harris, the Democratic Party candidate, has not yet completely declared her views but may adopt some of President Biden's regulatory policies.

As it looks likely from the current electoral records, Donald Trump is going to assume the presidency again, therefore, cryptocurrency activities in the US may see a rebirth, according to a recent report from HTX Ventures.

According to the report, the present government, led by President Joe Biden and SEC Chair Gary Gensler, has implemented strict restrictions that have limited the expansion of cryptocurrency initial public offerings (IPOs), in contrast to Trump's promised deregulatory initiatives.

Biden has prioritized national security and consumer protection, while Trump's campaign has promised to make the US a worldwide leader in cryptocurrencies, which may stop the flight of crypto companies and draw public listings.

Background for Crypto Becoming a Key Election Issue

More and more individuals are considering Bitcoin as a possible hedge against inflation and economic volatility after the 2008 financial crisis. It gives the middle class, in particular, hope for financial freedom. Despite actions by the government and central bank, Bitcoin remains an alternative asset due to its decentralization and limited quantity.

Even if the US dollar is still the world's reserve currency, investors' need for hedging assets is increasing, which is why Bitcoin is becoming more and more popular. It is seen to be a useful instrument for protecting against inflation, particularly for the working class, which is becoming more and more burdened.

Regardless of whether Donald Trump has won or if Kamala Harris has won the presidential election, US economic policy will see higher budget deficits. The Congressional Budget Office forecasts an average federal budget deficit of 6.2% of GDP for the next decade. If Trump reinstates his 2017 tax cuts and reduces tax rates further, the deficit may rise to 7.8% of GDP. In contrast, Harris intends to boost the corporate tax rate to 28%, although her other reform measures may still bring the deficit to 6.5% of GDP.

https://www.grayscale.com/elections

Impacts of the Bitcoin Act 2024

It is important to keep in mind that the Bitcoin Act, which is pending approval by Congress, may provide a fresh strategy for dealing with the American debt problem. This measure, which aims to integrate Bitcoin into the larger financial system, may draw significant sums of institutional and private money to assist in maintaining the U.S. debt structure and maybe even provide some stability to the global financial system.

Because Bitcoin is a decentralized and limited asset, it can be a useful instrument for investors and governments to protect themselves against risk and inflation. It may be strategically significant, especially in light of the pressures from inflation and debt.

Biden Vs Kamala: A Contrast in Crypto Regulation Policies

Over time, Donald Trump's stance on cryptocurrencies has changed significantly. By 2024, despite his early rejection of digital assets, he has come to embrace the potential of cryptocurrency, calling for fewer laws and establishing the United States as a global leader in blockchain technology.

Making the United States more competitive in Bitcoin mining and opposing central bank digital currency (CBDC) projects, which he sees as dangers to financial independence, are two examples of how Trump's "America First" policy is also applied to the cryptocurrency space.

In contrast, Kamala Harris' view is less clear, although it is expected to be consistent with the Biden administration's more cautious stance on cryptocurrency.

During Biden's term, the SEC, led by Chair Gary Gensler, expanded its surveillance of the industry, filing actions against many crypto businesses and eyeing decentralized financing (DeFi) as a possible issue. By 2024, several crypto businesses are awaiting final rulings on these lawsuits, and Harris may maintain this regulatory momentum to address security, taxes, and investor protection problems in the digital asset market.

Shifting Market Sentiments of the Voters

A national study done on Grayscale's behalf by The Harris Poll found that more than half of respondents are more inclined to vote for a politician who is "informed about crypto" than one who is not.

At the same time, interest in cryptocurrencies has grown among voters in battleground states. Since the 2020 election, Pennsylvania and Wisconsin, two crucial battleground states predicted to experience heated combat, have risen to fourth and fifth place in terms of cryptocurrency search interest on Google. Michigan, on the other hand, places ninth in this category.

https://a16zcrypto.com/posts/podcast/state-of-crypto-stablecoins-ai-us-election-builder-energy

The US Election’s Impact on the Crypto Landscape

With cryptocurrency becoming a hot topic, voters who favor digital assets may go toward Trump, who has publicly committed to encouraging crypto usage, relaxing restrictions, and allowing for blockchain breakthroughs.

The current Biden-Harris administration has adopted a more combative regulatory stance on the cryptocurrency sector, filing many lawsuits, limiting traditional banking services, and vetoing bipartisan legislation. The administration is also considering capital gains taxes on cryptocurrency.

Although Harris' crypto policies could be more friendly than Biden's and potentially enhance the industry's regulatory environment, she remains cautious on important topics like taxes, Bitcoin mining, and self-custody, and is significantly less pro-crypto than Trump.

The Republican National Committee has included a commitment to cryptocurrency in its official party platform, pledging that Trump will protect the rights to mine Bitcoin and “ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance.”

Trump has previously claimed that if re-elected, he will "fire" Gensler, the SEC Chief, and advocate for a more crypto-friendly attitude at the SEC. Historically, SEC chairs frequently depart when a new president enters office. As a result, when Trump takes his seat at the White House, the SEC leadership team will most certainly undergo significant changes.