How the 2024 US elections could affect the price of cryptocurrencies

The upcoming 2024 US presidential election has sparked curiosity in all markets, and the world of cryptocurrencies is no exception. With both Democratic and Republican candidates making bold promises to cryptocurrency holders, many are wondering whether the race between Kamala Harris and Donald Trump will have a significant impact on the price of cryptocurrencies. Here at Bintense, we believe that there are a number of short- and long-term factors to take into account as the election progresses.

Election year promises and their short-term impact on cryptocurrency prices

Both parties in this election cycle have tailored certain promises to appeal to the cryptocurrency community. Kamala Harris hinted at a progressive approach to financial technology, while Donald Trump talked about reducing regulatory restrictions. At first glance, these positions appear to be positive for the price of cryptocurrencies and may cause some optimism among individuals.

But regardless of who wins, any significant and lasting impact on cryptocurrency legislation will require the cooperation of Congress, which has historically been wary of cryptocurrencies. Even if a new President were willing to create an environment favourable to cryptocurrencies, he or she would face an intense legislative process to push through significant policy changes.

This political reality means that while the elections may cause short-term excitement in the markets, it is unlikely that the price of cryptocurrencies will change in the long term just because of who is sitting in the Oval Office.

How electoral uncertainty drives risk aversion

We have noticed that in the uncertainty that precedes important elections, people tend to wait and watch. During such periods, people often opt for safer assets, leading to a rise in the US dollar and in Treasury yields.

As people become more cautious and seek stability in the dollar, this risk aversion can put downward pressure on the price of cryptocurrencies. Rising Treasury yields further strengthen the dollar, making cryptocurrencies less attractive.

These patterns suggest that even in the absence of any major policy changes by the incoming President, the general uncertainty surrounding the elections may still have an impact on cryptocurrency markets, but mainly through an indirect channel.

Cryptocurrency price and future market factors

US elections often have a ripple effect on global markets, and the cryptocurrency market is no exception. Despite the excitement surrounding the candidates’ promises, the future of cryptocurrencies may be more dependent on other factors, such as Federal Reserve policy or global regulatory changes, than on the promises of the US President alone.

Cryptocurrency holders may experience volatility in the coming months, with price fluctuations driven by election-year promises and caution. However, as always, it is useful to remember that cryptocurrencies have historically been shaped by various global factors.

Here at Bintense, we remain committed to helping you navigate these changes by providing insights and news, keeping a close eye on both the market and the regulatory environment.

Finally, while the US elections may cause a short-term stir, they are unlikely to change the price of cryptocurrencies for long. The broader cryptocurrency landscape continues to evolve rapidly, but for the time being it is unlikely that a new administration alone will be a decisive factor in long-term price changes.