Why the US Presidential Election Affects Crypto and Bitcoin Prices
The upcoming US election has a significant impact on the crypto industry as a whole, as for the first time, two strong candidates will have to compete for votes among crypto market participants.
There are several factors why cryptocurrencies, especially Bitcoin, have become sensitive to the upcoming presidential election in the United States. And the fact that the candidates have openly talked about cryptocurrency in different ways is just a consequence of these factors. In other words, they were pushed to raise the issue of cryptocurrency regulation.
Crypto assets have become increasingly relevant among voters amid geopolitical and economic instability. In addition, the industry has grown and matured tremendously. According to Grayscale, nearly half of voters (47%) expect a portion of their investment portfolio to include cryptocurrencies. They cited inflation as the top election issue, which emphasizes the value of Bitcoin and cryptocurrencies in general.
Inflation in the US is on the rise, and it is important for voters to hear the candidates' positions on future economic policies. Therefore, cryptocurrencies have not only become a lifeboat for voters, but also part of the solution to the global economic problems of the larger players. A candidate's stance on cryptocurrencies will provide a clear understanding of how the industry and the economy as a whole will move forward.
A president who supports cryptocurrency-friendly policies may create a more favorable environment for the growth of digital assets. Conversely, a president who supports heavy regulation could lead to market uncertainty and lower prices. Therefore, elections themselves lead to increased volatility in the markets. During such periods, investors usually look for safe assets in the form of Bitcoin and other cryptocurrencies. As a result, the prices of these assets rise.
Presidential elections affect the geopolitical situation in the world, which in turn affects global markets, including cryptocurrencies. The president's policies on international relations and trade affect economic conditions and investor confidence around the world, which affects cryptocurrencies as well. Grayscale data shows that 41% of voters are choosing cryptocurrencies as a result of geopolitical tensions and risks to the dollar.
The media continues to put positive or negative pressure on cryptocurrency pricing. Media coverage of the election, and in particular a candidate's stance on cryptocurrencies, shapes perceptions among investors and the public at large. Some candidates openly started talking about Bitcoin and cryptocurrencies, which led to short-term growth of these assets, including memecoins on political topics.
This year has been an overall positive one for the crypto industry. The approval of Bitcoin ETFs by the regulator and the subsequent halving led to the main cryptocurrency reaching an all-time high. And it just so happens that the bullish momentum in the market coincided with this year's upcoming elections. The media is actively fueling the positive sentiment around cryptocurrencies and deliberately speculating on the relationship between the election and the crypto industry.
Conclusion
The US presidential election of 2024 has an impact on Bitcoin and cryptocurrencies in general, because a clear issue of regulation and development of the industry has become a necessity. About half of voters are connected to the crypto industry in one way or another. And they are closely watching and reacting to any promises made by the candidates, as economic and tax policies, as well as geopolitical stability, are important factors that shape investor sentiment.
