Today, people across the United States are voting in the presidential election, and this event could bring big changes for the cryptocurrency market. There are many seats up for grabs, including all 435 seats in the House of Representatives and 34 seats in the Senate. People in the crypto world are paying close attention because new leaders might bring new rules for how cryptocurrency works in the US.
Experts think that the prices of Bitcoin and other cryptocurrencies might swing up and down a lot as the election gets closer and closer. This kind of movement, often called “volatility,” is expected because big news, like a new president or a change in government, can make people buy or sell a lot of cryptocurrency at once. When many people react quickly, it can make prices jump around in big ways.
Why This Election Matters for Crypto
In this election, the two main candidates have different ideas about cryptocurrency. They’ve been sharing their plans about crypto regulations, which are the rules that tell people and companies how to use digital money legally and safely. These rules are important because they can help make cryptocurrency more popular, or they can make it harder to use.
The two candidates are Democrat Kamala Harris and Republican Donald Trump. Both of them finished their campaigns by traveling to important states and talking to voters, especially in places where people aren’t sure who they want to vote for. These states are called “swing states.”
Donald Trump’s View on Cryptocurrency
Donald Trump, who didn’t always support cryptocurrency, has now become a big fan of it. He’s even accepting crypto donations for his campaign, which is a strong sign that he wants people in the crypto world to know he’s on their side. Trump wants the US to be a leader in cryptocurrency and has even criticized the idea of a central bank digital currency (CBDC), which is like a digital version of the US dollar controlled by the government.
He thinks that the US should let people have more control over their digital money instead of letting the government control it completely. By accepting cryptocurrency donations, Trump shows he is open to the idea of letting people use digital money in new ways.
Kamala Harris’s Approach to Cryptocurrency
Kamala Harris, the Democrat running against Trump, talked about cryptocurrency publicly for the first time at a fundraiser on Wall Street in September. At that event, she promised to create rules that are safe and clear for people and companies using new technologies like artificial intelligence and digital money.
Harris wants to make sure that people using cryptocurrency can trust that their money is safe and that there are fair rules in place. She also believes that businesses should have a reliable environment to grow. While she might not be as enthusiastic as Trump about making the US a crypto hub, her approach would bring more structure to the market.
Predictions on Who Will Win and What It Means for Crypto
There’s a popular platform called Polymarket where people can use cryptocurrency to bet on different outcomes, including who they think will win the election. Right now, Polymarket shows Trump with a 62.3% chance of winning and Harris with a 37.8% chance. Many crypto enthusiasts are paying attention to this because it gives them a way to follow the election in real-time and make predictions using crypto.
The Federal Reserve’s Role in Crypto Prices
The US Federal Reserve, also known as the Fed, is the central bank that makes decisions about interest rates. This week, there is an important meeting happening in Washington called the FOMC (Federal Open Market Committee) meeting. During this meeting, experts think there’s a 99% chance that the Fed will lower interest rates by 25 basis points. This rate cut could make it easier for people to borrow money, which might encourage them to invest more, including in cryptocurrency.
How the US Election Affects Bitcoin Prices
The price of Bitcoin, the most popular cryptocurrency, could be especially volatile during this election. Volatile means the price might go up and down a lot. People who follow cryptocurrency closely believe that after the election, the price of Bitcoin could rise, based on what has happened in past elections.
Currently, Bitcoin is trading at around $68,870 after reaching a low of $66,835. The total value of the cryptocurrency market is at $2.39 trillion, and Bitcoin makes up 56.8% of this total value.
In the days leading up to the election, a large number of people sold off their Bitcoin. On November 4, US Bitcoin ETFs (Exchange-Traded Funds) saw their second-highest day of withdrawals since they began. Investors took out about $541 million, following another big sell-off of $563 million in May. Fidelity’s ETF, FBTC, saw the biggest withdrawals, with $170 million pulled out in just one day.
This movement shows that people are nervous about the market and might be taking out their money to wait and see what happens after the election.
What Might Happen to Bitcoin Prices After the Election
After past elections, Bitcoin’s price has often gone up. In the 2012 election, the price increased a lot, but by the 2016 and 2020 elections, the increases were smaller. If this trend continues, experts believe Bitcoin’s price could go up about 40% after the 2024 election, which could push its price close to $105,000 by 2025.
If Trump wins, some experts think Bitcoin might even reach $90,000. However, if prices keep going down and drop below the $65,000 level, it might cause more people to sell, which could push Bitcoin’s price down to around $60,000.
Final Thoughts on the Future of Crypto
The last part of the year is usually a good time for Bitcoin, and if the Fed lowers interest rates, it could help the whole crypto market grow. A supportive economic policy combined with the effects of the election could create a positive environment for cryptocurrencies. This means that 2024 might be a big year for crypto growth, especially if the market conditions remain favorable.
However, it’s still important to remember that the crypto market is known for being volatile, especially during times of political change. Investors need to be careful and keep an eye on the market because prices can change quickly. The outcome of this election will not only impact the US but could also have a ripple effect across the entire cryptocurrency world.
This easy-to-read article should give a good overview of how the 2024 US election could affect the cryptocurrency market. It explains the positions of the main candidates, Donald Trump and Kamala Harris, on cryptocurrency, what experts think might happen with Bitcoin prices, and the impact of possible changes in interest rates.