Cryptocurrencies at the Forefront of the 2024 Election Cycle
The 2024 election cycle is intensifying, and cryptocurrencies are emerging as a significant topic in the political landscape. According to analysts at Bernstein, the GOP is adopting a pro-crypto stance, viewing it as a strategic move to attract voters and secure campaign funding from super PACs supporting crypto-friendly politicians.
Trump Leading the Charge?
Bernstein analysts report that Republicans see a favorable stance on the crypto industry as a dual opportunity: winning over tech-savvy voters and tapping into substantial financial backing. This scenario is reminiscent of the “Trump Trade,” a term coined during the surge in US stocks, Treasury yields, and the dollar following Donald Trump’s 2016 election victory. If Trump wins the election, a crypto rally may be triggered by institutional adoption and a more accommodating regulatory environment.
“The Republican side sees crypto not just as a vote bank but also a meaningful source of funding,” analysts wrote. They added, “If the election sentiment shifts more Republican, crypto would end up as the primary ‘Trump trade’ and hopes of a favorable regulatory regime would change the ‘use-case’ narrative around blockchains.”
Behind the Scenes
Recently, Trump met with leaders of several Bitcoin mining companies at Mar-a-Lago, expressing strong support for the crypto industry and pledging to advocate for crypto mining if re-elected. Despite his recent pro-crypto signals, concerns remain that he could revert to his previous stance if elected. A TD Cowen report cautions that Trump’s statements during the first presidential debate will be crucial, as any ambivalence could reignite fears of a return to his first-term skepticism.
“If [Trump] suggests anything other than total support, this could feed anxiety that he will revert to the skeptical approach from his first term if he is re-elected,” the Cowen report states. Additionally, it notes that President Joe Biden might use the upcoming debate to clarify his position on crypto.
Meanwhile, the SEC has faced criticism from crypto advocates under the Biden administration for its stringent actions against crypto trading platforms accused of dealing in unregistered securities. However, some observers believe that the SEC’s stance is softening, evidenced by the approval of Bitcoin and Ether exchange-traded funds (ETFs) earlier this year.
Not a financial advice