If Harris is elected president, what impact will it have on the crypto industry?

Author: Alvis, Mars Finance

As the 2024 US presidential election approaches, the tension in the capital market has reached a critical point, and the Altcoin market is even more nerve-wracking. This year, the high-profile Trump, who has gone through life-and-death crises, is running for election with the slogan "Make America the Capital of Crypto", which has instantly ignited the enthusiasm of the Altcoin circle. However, history repeatedly reminds us that subtle changes in policies often become the watershed for the market.

Reviewing the "New Deal" after Roosevelt took office in 1933, the economic rules of the United States were completely reshaped overnight, and a large number of enterprises were forced to adapt to the new policy direction, and the market pattern was reshuffled and reorganized. And this time, the Altcoin industry may be facing the same fate. As Harris steadily advances in the election, her and Biden's highly consistent policy positions mean that the current government's anti-Altcoin regulation may continue to intensify. For a Altcoin market that advocates freedom and decentralization, this policy direction may be a real life-and-death test.

So, if Harris is elected, what will the future of Altcoins be? What potential opportunities may it contain that cannot be ignored? We will delve into these questions with analysis.

According to data from the prediction website Polymarket, the probability of Trump's victory is currently 62.5%, while Harris' chance of winning is only 37.5%. Although the prediction market believes that Trump's victory rate is higher, the Forbes poll on October 31 shows that Harris is leading Trump nationwide by a slim margin of 1%, and 10% of voters may change their stance before the election.

In the seven key swing states that will decide the election, Harris' support rate is 49%, slightly ahead of Trump's 48%. And just a week ago, Trump was leading Harris 50% to 46% in these states.

Therefore, although many Altcoin supporters are more optimistic about Trump's election, Harris still has the possibility of succeeding.

The "Comeback" Presidents Who Were Not Favored But Eventually Surpassed

There have been several instances in US history where candidates who were not favored in the early stages of the campaign, or even underestimated by opinion polls, ultimately managed to pull off a successful upset.

· In 1948, Truman was one of them. Opinion polls showed him trailing the Republican candidate Thomas Dewey. The media and polling agencies even prematurely declared Dewey the winner, and some newspapers even printed headlines announcing "Dewey Defeats Truman". However, Truman launched a series of intensive campaign activities, directly addressing the voters and emphasizing the Democratic Party's achievements in economic and social policies, ultimately winning the election. This election was considered a classic case of polling inaccuracy.

· In 1992, Clinton was also not the frontrunner in the Democratic primary, and faced a slump in his campaign due to a series of negative reports and scandals, with many experts predicting he would have difficulty making it to the end. But due to his flexible campaign strategy, ability to communicate with the public, and the economic difficulties at the time, he gradually gained support. He eventually defeated the incumbent President George H.W. Bush and third-party candidate Ross Perot in the three-way race to successfully win the election.

· In 2016, Trump himself also staged a major comeback. Trump was seen as a "hopeless" candidate not only in the Republican primary, but was also severely underestimated by mainstream polls in the final election against Hillary Clinton. During the campaign, Trump, relying on his strong populist style and appeal to the American middle and lower classes, gained the support of a large number of voters, especially with his outstanding performance in the swing states, ultimately winning the election.

Looking at this, we should not draw conclusions before the actual voting results are revealed. Just as Bitcoin faced a "black swan" event at the height of its bull run, no one can predict the final outcome of the election in advance.

Harris Elected: Disaster or Market Adjustment? Polarized Market Opinions

First, we have to admit that if Harris is elected, there is a high probability that she will continue the policy direction of the Biden era. At this moment, Altcoin investors' hearts are like riding a roller coaster.

Analysts at the renowned Bernstein have already predicted that if Harris wins, Bitcoin's price could see a significant decline by the end of the year, possibly even dropping by 10%.

On the other hand, veteran Altcoin trader Crypto Rand is much more calm. He believes that regardless of who occupies the White House, the overall direction of the Altcoin market will not change, and the bull market will eventually arrive, only that the road may be a bit bumpy.

So, there are two key points here: first, Biden-style policies are not Altcoin-friendly, and second, the market is guessing whether Harris will intensify regulation, thereby causing greater uncertainty.

Crypto Rand said that even so, Bitcoin could bottom out and rebound in 2025, driving the entire market into a new bull cycle. These predictions are not unfounded, because whether it's Bitcoin or Altcoins, the ups and downs of the Altcoin market have already become the norm. And for some staunch supporters, this is just short-term volatility and does not represent a reversal of the overall trend.

Continuation of Regulatory Policies: Gary Gensler's "Enforcement Regulation" and the Biden Administration's Regulatory Approach

We need to deeply understand how the Biden administration has been dealing with Altcoins in order to more accurately predict Harris' policy direction. Since Biden took office, the US Securities and Exchange Commission (SEC), under the leadership of Chairman Gary Gensler, has launched an "enforcement regulation" mode, especially targeting the Altcoin industry, which can be described as ruthless. The SEC not only sued major exchanges like Binance and Coinbase, but also conducted thorough investigations into unregistered Altcoin securities. Both within and outside the market, it is widely believed that Gensler's regulatory approach has obvious high-pressure characteristics, and he has single-handedly become the "guardian of order" in the Altcoin market, but his methods have also sparked a lot of controversy, with some even accusing him of being a "disruptor" of the market.

Here is a review of some regulatory bills and enforcement actions from the beginning of 2021 to the end of Biden's term in 2024, in chronological order:

2021

· March: The Financial Crimes Enforcement Network (FinCEN) of the US Treasury Department proposed a proposal to strengthen Anti-Money Laundering (AML) and Know-Your-Customer (KYC) requirements for Altcoins, aimed at curbing the use of Altcoins in illegal activities.

· August: The Commodity Futures Trading Commission (CFTC) filed a lawsuit against the Altcoin trading platform BitMEX, accusing it of failing to implement proper AML and KYC measures. Eventually, BitMEX agreed to pay a $100 million fine and settle with the CFTC.

2022

· February: The SEC filed a lawsuit against the Altcoin lending platform BlockFi, accusing it of failing to register its yield account products as securities. Eventually, BlockFi agreed to pay a $100 million fine.

· March: President Biden signed an executive order on digital assets, requiring federal agencies to coordinate the development of an Altcoin regulatory framework, aimed at protecting consumers, maintaining financial stability, combating illegal activities, and exploring the possibility of a US Central Bank Digital Currency (CBDC).

· June: The US Department of Justice established a National Cryptocurrency Enforcement Team, and the department immediately intervened in multiple cases after its establishment, including tracking the Altcoin assets of the illegal "Silk Road" trading platform, and assisting in tracing international Altcoin asset illegal transfer cases.

· September: The US Treasury Department released three reports on digital assets, focusing on the risks of Altcoins in illegal finance, consumer protection, and payment systems, further clarifying the government's regulatory stance on Altcoins.

· October: The SEC began investigating the Non-Fungible Token (NFT) project Bored Ape Yacht Club (BAYC) under the Yuga Labs brand, concerned that its tokens may involve unregistered securities sales.

· In December: After the FTX bankruptcy, the CFTC, SEC, and the Department of Justice launched a joint investigation into FTX, aiming to determine if there were any misuse of customer funds, misappropriation, and fraudulent activities.

2023

· In May: Bipartisan members of the U.S. Congress proposed the "Crypto Tax Fairness Act," suggesting the implementation of capital gains tax exemptions for small transactions to promote the everyday use of cryptocurrencies and ensure the industry is not suppressed by a complex tax system.

· In August: The SEC filed lawsuits against the major cryptocurrency exchange Binance and Coinbase, alleging that they were not registered as securities exchanges and that certain crypto assets were considered unregistered securities. This action by the SEC was seen as a comprehensive cleanup of the cryptocurrency market, imposing stricter compliance requirements on trading platforms that do not comply with securities laws.

· In September: The Biden administration expressed an interest in further examining all cryptocurrencies using the proof-of-stake (PoS) mechanism, with the intention of defining them as securities. The SEC began to intensify its regulation of PoS assets like Ethereum, stating that their voting rights structure is similar to traditional stocks and may require compliance with securities laws.

· In November: Binance agreed to pay a $4.3 billion fine to settle the U.S. government's multi-year investigation into the company. Binance admitted to participating in alleged money laundering, unlicensed money transmission, and sanctions violations. Additionally, founder CZ acknowledged the failure to maintain an effective anti-money laundering program and stepped down as CEO.

2024

· In April: CZ was sentenced to four months in prison by a U.S. federal court in Seattle for violating U.S. anti-money laundering laws (he has since been released).

· In May: The U.S. House of Representatives passed the "21st Century Financial Innovation and Technology Act" (FIT21), which laid the legal foundation for the regulation of digital assets and further clarified the regulatory responsibilities of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), especially in the management and oversight of cryptocurrencies and digital financial products. The FIT21 Act was seen as an important step in establishing a federal regulatory framework for digital assets.

· In June: The U.S. Treasury Department issued a final rule requiring all cryptocurrency platforms to report user transaction details to the IRS starting in 2026, with the aim of tightening tax regulation of cryptocurrencies and reducing tax evasion.

These events and legislation clearly indicate that the Biden administration's overall attitude towards cryptocurrencies is leaning towards stricter regulation. Under the leadership of Gary Gensler, the SEC has adopted an "enforcement-based regulatory" approach, bringing the cryptocurrency industry into a more stringent legal framework and requiring market participants to comply with regulatory standards.

It is worth noting that the future role of Gary Gensler is currently uncertain. Although Trump had promised to fire Gensler on "day one" if elected, he legally cannot directly decide the SEC chairman's tenure. And Harris has not yet made a formal statement on Gensler's reappointment, with market analysts generally believing that Gensler's "enforcement-based regulatory" strategy may face resistance.

Renowned cryptocurrency analyst Crypto Rand bluntly stated that Gensler's policies are "the biggest burden on the U.S. cryptocurrency industry."

Rashan Colbert, the policy manager of the decentralized exchange platform dYdX, also pointed out that if the new administration can replace the SEC chairman, it will mark the end of overreach in enforcement and harmful regulation, which may help the cryptocurrency market develop in a compliant manner.

Billionaire investor Mark Cuban also expressed doubts about Gensler's enforcement approach, believing that Harris' team is inclined to oppose the "enforcement-based regulatory" model and hopes to promote the development of the cryptocurrency market through a clear regulatory framework.

Cuban pointed out that Harris "prefers clear regulatory rules rather than relying on litigation," a approach that can allow companies to develop applications without having to move overseas.

Other industry observers believe that even if Harris replaces Gensler, the enforcement intensity in the cryptocurrency market will not weaken. Venture capitalist Tim Draper went further, calling for a complete overhaul of U.S. securities laws, pointing out that the current Howey rule was established 80 years ago and is no longer suitable for the "dynamic and constantly growing modern market environment." The real turning point lies in whether the industry can reduce uncertainty through more transparent and clear regulations. This is a matter of great concern in the market, as a clear regulatory framework can help companies and investors make more stable arrangements, rather than feeling like they are walking a tightrope with each policy release.

Global Liquidity and Market Opportunities: Will Loose Monetary Policy Become a Bull Market Driver?

Yang Youwei, chief economist at Bit Mining, pointed out that if Harris is elected, cryptocurrency investors should pay special attention to global economic liquidity.

The key point here is: Will "hot money" flow back into the cryptocurrency market, becoming a catalyst for a new bull market? Yang Youwei's view is clear: the more accommodative the monetary policy, the greater the possibility of capital inflows into the cryptocurrency market. Given the current uncertainty in the global economy and the generally loose policies adopted by central banks around the world, the influx of hot money could indeed bring more market opportunities.

The correlation between Bitcoin price and global liquidity. Source: Lyn Alden

Cryptocurrency entrepreneur Erik Finman also supports this view. He believes that if the Federal Reserve adopts a more accommodative stance under Harris' leadership, then even with regulatory challenges, the increase in market liquidity will still provide support for prices. In other words, the further Harris' policies go down the "loose monetary" path, the greater the bull market potential for the cryptocurrency market.

However, all of this is predicated on whether the U.S. can withstand greater inflationary pressures. It can be foreseen that if Harris tries to continue the loose policy, it will inevitably face considerable fiscal pressure and market resistance. In this case, companies and investors must be wary of the volatility risks in the cryptocurrency market and not easily ignore the chain reactions caused by monetary policy.

Lack of Clear Policy Causing Panic: Will the U.S. Cryptocurrency Industry Be "Geographically Fenced"?

For many cryptocurrency market participants, a major flaw of Harris is her ambiguous attitude towards cryptocurrencies. In September this year, Harris only publicly stated that her government will encourage investment in artificial intelligence and digital assets to maintain U.S. competitiveness. However, it is obvious that such a statement lacks details and cannot reassure the market. This ambiguity has led many to worry that she may continue Biden's tough line, further increasing market uncertainty.

Venture capitalist Tim Draper pointed out bluntly that "fear" has begun to spread in the industry, especially for smaller cryptocurrency companies that are more sensitive to uncertainty. Rather than lingering in the uncertainty of U.S. regulatory policies, more and more companies are choosing to go overseas, seeking a clearer policy environment. Currently, countries like Dubai and Singapore have more relaxed and transparent policies compared to the U.S., and the "geographical fencing" phenomenon is emerging in the U.S.

Colbert, the policy manager of the well-known decentralized platform dYdX, further added: "Other countries are moving faster than the U.S. If the new U.S. government is unwilling to maintain competitiveness in the cryptocurrency field, this trend will continue." Even if the Harris government relaxes policies in certain areas in the future, without systematicity and clarity, it will inevitably push innovators towards more inclusive markets.

Top 10 countries in the 2024 Henley Cryptocurrency Adoption Index. Source: Henley & Partners

The "2024 Henley Cryptocurrency Adoption Index" published by the investment migration consultancy Henley & Partners ranked the U.S. behind the UAE, Hong Kong, and Singapore in terms of cryptocurrency adoption.

Despite this, most major cryptocurrency companies have not yet left the United States. Although the regulatory authorities have not been very friendly in the past few years, the US market is indeed too tempting, and many cryptocurrency companies cannot leave.

In this regard, if Harris is elected president, the market obviously needs a clear and strong policy signal to stabilize investors' confidence. The current chairman of the US Securities and Exchange Commission has caused widespread controversy with his tough regulatory approach, and the market generally expects that Harris may appoint a new leader after taking office to alleviate the industry's dissatisfaction.

But the real challenge is whether the Harris government can find the ideal balance - to protect the basic safety of the market while promoting the prosperity of the industry. Under a more relaxed monetary policy, if a stable policy environment can be provided, the potential of the cryptocurrency market will undoubtedly be released.

Dogecoin and the "Shill King" Musk in the Volatile Cryptocurrency Market

In the turbulent world of cryptocurrencies, Dogecoin has always been an "outsider". Unlike mainstream cryptocurrency assets such as Bitcoin and Ethereum, Dogecoin not only has high volatility, but also has a mocking and self-deprecating character. Who would have thought that this cryptocurrency, which was originally a joke, would have sparked a global craze under the leadership of Musk. And this "Shill King" Musk has long become the spokesperson for Dogecoin, whether it's his personal tweets or Tesla's cash flow management, he frequently brings Dogecoin into the mainstream vision, and uses his personal influence to open up a major road for this niche project.

Dogecoin has surged up to 80% in the past month

So the question is: if Trump wins the 2024 US election, and Musk "takes office" to be responsible for the so-called "Department of Government Efficiency" (DOGE), the Dogecoin market will undoubtedly be more lively. But if Trump loses and Harris is elected, what will happen?

Harris' policy stance has always been ambiguous, which is not good news for the cryptocurrency market, especially for the highly emotional Dogecoin investors.

Crypto analyst Crypto Rand predicts that if Harris is successfully elected, the market panic sentiment may spread rapidly. Since Dogecoin investors are often more inclined to short-term emotional drives, once the policy is unclear, the market may enter a short-term selling mode. That is to say, the price of Dogecoin is likely to experience a "free fall", and if this panic sentiment is not dissipated in time, it will lead to deeper market volatility.

Musk: Siding with Trump and His "Puppet Theory" of Harris

Speaking of which, Musk's own performance in this election is also very eye-catching. As the "Shill King" who dares to speak and act in the tech circle, he clearly sided with Trump this year, and even spent millions of dollars to support his campaign. Through a high-stakes lottery activity, he intends to drive more voters to participate in the election, especially in the key states where the election is deadlocked. This Tesla CEO not only speaks out through his own social media influence, but also directly supports the campaign through a US political action committee (PAC), sparing no effort to stand on Trump's side.

More topically, Musk's view of Harris. In public, Musk bluntly called Harris a "puppet" and said that Harris does not have real decision-making power. In his remarks, Harris is seen as a "front-stage puppet" - a political tool person lacking substantive decision-making power. Musk's all-out support as one of America's top billionaires is extremely rare in American history, so Musk couldn't help but say "I might get arrested and lose everything if Trump loses this time."

The "Emotional Panic" and Future Risks of the Dogecoin Market

Compared to Bitcoin and Ethereum, the market structure of Dogecoin is more dependent on emotional orientation, and once investor confidence is unstable, it is easy to form a large-scale selling wave. In the past, under Musk's support, the price of Dogecoin often fluctuated rapidly in a short period of time, but if Harris takes office and the policy is unclear, whether Musk's influence can be maintained remains to be seen.

Especially against the background that Tesla's third-quarter financial report has been released, its financial performance is gradually stabilizing, and its Bitcoin holdings have not changed, whether Musk's enthusiasm for Dogecoin will be affected by the political situation has also become a market focus.

If Trump loses, the political pressure Musk faces will rise sharply, and his personal activity in the cryptocurrency market may be greatly weakened. This is obviously not good news for Dogecoin. After all, Musk's support is an important reason for pushing Dogecoin to frequently appear in the public eye. Once his shill effect subsides, the price of Dogecoin may enter a period of emotionally driven volatility, and even face further downside risks.

Conclusion: Unclear Policies + Market Turmoil, Dogecoin Needs to Beware of "Double Blow"

In summary, the unclear policy after Harris' election, the risk factors of Musk siding with Trump, and the instability of investor sentiment, all make the future of Dogecoin obscure. The future of Dogecoin may be pulled between Harris' policy tone and Musk's personal influence. For investors, especially short-term speculators, they must be vigilant about changes in market sentiment and not rashly chase the rising and falling prices, so as not to fall into unnecessary risks.

In short, this 2024 election will not only determine the future pattern of the US political arena, but may also become a watershed in the fate of Dogecoin and Musk.

Future Outlook: If Harris is really elected president, will he reshape the cryptocurrency market landscape?

Currently, there are only four days left until the US election day, and no matter who moves into the White House, the volatility of the cryptocurrency market is probably inevitable. In the short term, strict policy control or the good news of monetary easing will only be a peak or trough in the market waves; in the long run, the direction of the cryptocurrency market will not change due to this, but the road will be more tortuous and unpredictable.

As for where the cryptocurrency will go in the future, only God knows.