Bitcoin and the 2024 US Election: Analysis of Turning Points in the Encryption Industry

As the 2024 U.S. presidential election approaches, Bitcoin and encryption have become important election topics. This article comprehensively analyzes the reasons for the increased importance of encryption in elections, the policy positions of presidential candidates, and the potential impact of the election on the encryption industry.

Cryptocurrency Becomes an Important Election Topic Background

Bitcoin's significance in the United States

Demand to hedge against inflation strengthens

Real wage levels in the United States have stagnated for a long time, and the wealth gap continues to widen. Bitcoin is seen as a potential tool to combat inflation and economic uncertainty, particularly providing hope for the middle class to achieve economic independence.

Regardless of whether Trump or Harris wins, the U.S. fiscal deficit may further expand. The ways to address high debt are limited, and diluting debt through inflation may become the government's choice, which will further compress the purchasing power of the working class.

It is noteworthy that the Bitcoin bill currently awaiting congressional approval may provide a new solution to the U.S. debt issue. The bill aims to integrate Bitcoin into a broader financial system, potentially helping to stabilize the U.S. debt structure by attracting significant private and institutional capital.

Strengthen the international influence of the US dollar

Stablecoins have become a focal point of policy discussions. Currently, over 99% of stablecoins are denominated in US dollars, far exceeding other currencies. The widespread use of stablecoins solidifies the dominance of the US dollar in the digital asset market, providing new avenues for the United States to maintain its advantage in the global financial system.

Stablecoins may further consolidate the financial foundation of the United States domestically. They have become one of the top 20 holders of U.S. Treasury bonds, providing additional liquidity support to the economy.

Voter interest in encryption is rising

Surveys show that about half of potential voters in the United States are more inclined to support candidates with a positive attitude towards cryptocurrency. Voter interest in cryptocurrency has also significantly increased among swing state voters.

The Biden administration's regulatory hunting of encryption companies

The Biden administration has strengthened regulations on cryptocurrencies and taken legal action against several large cryptocurrency companies. This has sparked discontent and backlash within the industry.

Encryption enterprises play a core role in donations.

In 2024, cryptocurrency companies have become one of the major forces in political donations in the United States. This funding not only influences the policies of presidential candidates but also drives congressional election policies favorable to encryption.

The Impact of the Election

The policy propositions of both candidates

Harris

Harris's statements on cryptocurrency policy are relatively limited. The current Biden/Harris administration's regulatory stance towards the encryption industry is quite adversarial. Although Harris's encryption policy may be friendlier than Biden's, she remains cautious on key issues.

Trump

Trump has shown a strong interest in the encryption industry, promising to make the United States the "capital of global encryption and Bitcoin". He has proposed a series of encryption policy recommendations, including establishing a Bitcoin government reserve, forming an encryption advisory committee, and preventing the Federal Reserve from launching a digital currency.

The situation of "splitting the government" may occur.

Currently, it seems that unless one party can simultaneously secure both the Senate and the House of Representatives along with the presidency, a period of instability is almost inevitable. A "divided government" scenario is very likely to emerge, which may lead to policy deadlock.

The SEC leadership is likely to change.

Regardless of whether Harris or Trump wins, there may be significant changes in the leadership of the SEC. This could alter the SEC's regulatory stance on cryptocurrencies.

Macro liquidity: volatility is inevitable, the degree of QE is the determining factor.

When the Federal Reserve lowers interest rates and global capital liquidity significantly increases, it is often a period when the price of Bitcoin continues to rise. Trump promised that if he is elected again, he will significantly lower interest rates, which may drive up Bitcoin and other encryption assets.

How Elections Affect Encryption Startups

Web3 prediction markets achieve absolute superiority over Web2 competitors

Polymarket and other Web3 prediction markets have performed prominently in the U.S. elections, capturing a major share of the total betting volume. These platforms are gradually becoming widespread financial tools, with their influence extending to various fields such as public opinion, financial hedging, and business decision-making.

Predicting the future development direction of the market

Currently, trading platforms have launched prediction tokens and related leveraged trading for the US elections. In the future, prediction markets may combine with more financial instruments to provide users with richer trading options.

Trump's victory means encouraging cryptocurrency companies to incubate and list in the United States.

The Trump administration may provide a clearer regulatory framework and a more relaxed regulatory environment, which would be beneficial for encryption companies to develop and list in the United States. This could change the current situation where a large number of encryption companies are fleeing the U.S.

DeFi and BTCFi will be the first to benefit.

Trump has shown interest in the decentralized finance ( DeFi ) sector. BTCFi, as an important branch of DeFi, may develop rapidly in a more relaxed regulatory environment. The innovation of BTCFi will be led by developers, driving a series of groundbreaking applications based on Bitcoin's programmability.

Overall, the 2024 US election may become a turning point for the cryptocurrency industry, shifting from strict regulation and suppression to support for innovation. Regardless of the election outcome, cryptocurrency has become a political and economic force that cannot be ignored, and its future development is worth continuous attention.