The shocking news of Joe Biden’s withdrawal from the 2024 United States presidential election race has sent shockwaves through the financial markets, including the crypto community, particularly concerning liquidations.
Such sudden political news caused significant market volatility. In the 30 minutes following President Biden’s announcement, around $67 million worth of leveraged long positions in the crypto market were sold, data on Coinglass showed.
As former US president Donald Trump entered his presidential campaign with a seemingly obvious pro-crypto agenda, Biden’s exit brought a new surge of questions about the future of crypto, especially following Biden’s endorsement of Vice President Kamala Harris’ entrance into the presidential race.
We spoke to industry experts to see where their thoughts stand, on the future of the cryptocurrency industry ahead of the upcoming US presidential elections.
Key Takeaways
- Biden’s unexpected withdrawal caused significant market volatility, leading to the liquidation of around $67 million worth of leveraged long positions within 30 minutes.
- Investors are unsure whether the next administration will adopt a more stringent or lenient approach to cryptocurrency regulation, causing market volatility as they adjust their positions.
- Trump’s entry into the presidential race with a pro-crypto agenda has fueled speculation that his potential victory could lead to favorable regulations and broader adoption of cryptocurrencies.
- Harris’s position on cryptocurrency regulation remains unclear, adding to market uncertainty.
- The outcome of the presidential election is expected to have a significant impact on the cryptocurrency market.
Crypto Markets Strongly React to Biden’s Exit
Cryptocurrency markets are known to react loudly and effectively to stressful political events, and Biden’s exit from the presidential election campaign was no exception.
During that time, the price of Bitcoin (BTC) fell by around 1.4% from $67,461.61 to $66,493.43. The cryptocurrency has been volatile ever since, falling to as low as $65,500 on July 23, 2024, and currently trading at about $66,000.
Anndy Lian, an intergovernmental blockchain expert and author of Blockchain Revolution 2030, told Techopedia that Biden’s “unexpected withdrawal introduced a level of unpredictability, causing investors to quickly adjust their positions” in the market. The immediate liquidation of long positions indicated that many traders were “caught off guard and moved to mitigate potential losses.”
On top of that, Biden’s endorsement of Kamala Harris has the potential to reshape the political landscape, further influencing market sentiment. Lian said:
“Investors might have perceived Harris as having different policy stances on cryptocurrency regulation compared to Biden, prompting a reassessment of the market’s future. This shift in political dynamics can lead to volatility as traders speculate on how new leadership might impact the regulatory environment for cryptocurrencies.”
Ben Kurland, the CEO of crypto research and charting platform DYOR, added that Biden’s announcement is largely seen as a positive within the crypto community, which was also reflected in BTC’s price which gained about 2.8% after falling by 1.4% post-announcement.
“Investors reacted strongly to the news as Biden’s exit signals a shift in future regulatory policies. The prospect of a new administration with positive views on cryptocurrency is seen as a bullish sentiment. This development indeed suggests that the upcoming elections could have a much larger impact on the crypto market than previously anticipated.”
Biden’s Decision Triggered Uncertainty Over Future Regulations
The relationship between the US and its regulatory policies regarding cryptocurrency markets is a never-ending story, and Biden’s decision to exit the presidential race has certainly opened up new concerns about where regulatory policies, economic strategies, and international relations could be headed in the future.
“Cryptocurrencies are particularly sensitive to regulatory news. Under Biden’s administration, there were ongoing discussions and actions regarding the regulation of digital assets. His exit could mean a potential shift in regulatory approaches depending on who succeeds him.
“Investors might anticipate either a more stringent or a more lenient regulatory environment, leading to volatility in the market as they adjust their positions based on these expectations,” Lian noted.
Vijay Pravin Maharajan, the CEO and founder of bitsCrunch, an AI-enabled decentralized blockchain data network, added that following Biden’s announcement, investors could expect more of Trump’s crypto-friendly rhetoric, especially at the upcoming Bitcoin Conference in Nashville, where Trump is due to speak.
However, Maharajan also reminded that in the long term, the future of crypto will still hinge on progressive regulatory advancements and not just pure speculation.
Of course, Biden’s exit also means that investors and stakeholders will now closely be watching the new candidate’s stance on crypto regulation, as it has the potential to significantly influence market sentiment and investment strategies.
DYOR’s Kurland added that with Biden’s exit, many in the crypto industry are confident that Trump could win the elections.
Expectations For Trump’s Presidency on the Rise
Trump is using the hype surrounding cryptocurrencies to bolster his candidacy during presidential campaigns; however, industry experts note that current events could continue to favor him.
Alex Momot, the founder and CEO of Peanut Trade told Techopedia that while Biden’s exit might not play a significant role for the future of crypto, it could still affect Republican policies and the overall expectation that Trump could become the next president.
Momot added that in that case, regulations from the Vice President or rumors about Larry Fink could also play a very positive role in the crypto industry. In recent days, the New York Post reported that if Trump wins the elections, he could appoint BlackRock’s CEO, Larry Fink, as the next Treasury Secretary due to their shared history. However, Trump denied this possibility.
DYOR’s Kurland added that Trump has shown he is willing and able to support crypto, especially in his recent comments that BTC and other digital currencies “are very much here to stay.”
“If Trump wins, I believe it will not simply be an initial shock but will likely propel Bitcoin to new heights and allow for more innovation and growth in the sector in the US, which should time up nicely with an anticipated extension to this bull market cycle.”
However, all of this could also be very ambiguous as it highly depends on where Kamala Harris stands in relation to cryptocurrency policies.
Kamala Harris & Crypto: An Uncharted Territory
Speaking with Techopedia, Lian noted that Harris’s stance on cryptocurrency policies continues to remain ambiguous. However, in a recent interview with Decrypt, US entrepreneur and BTC enthusiast Mark Cuban noted that he has received a handful of questions about crypto from Harris’ campaign team.
Lian added that Harris does have a history of being tech-friendly, stemming from her time as District Attorney of San Francisco and Attorney General of California, where she engaged with the tech industry extensively. Thus, her background suggests she may have a more open and innovative approach to technology, including cryptocurrencies.
“Secondly, as Vice President, Harris has been part of an administration with a cautious but progressive stance toward digital assets,” Lian added. “The Biden administration has focused on balancing innovation with consumer protection and regulatory oversight. If Harris continues in this vein, we might expect her to support a regulatory framework that encourages innovation while ensuring market stability and protecting investors.”
Michael Brescia, the CEO and co-founder of Cerus Markets, agreed, noting that while Democrats tend to be more pro-regulation than Republicans, there is a slight possibility that Harris will take a more balanced approach toward crypto regulation.
However, since Harris is yet to outline her views on crypto regulation, it leaves much room for speculation.
BitsCrunch’s Maharajan added:
“Given the plaudits that Trump has received from the crypto community, the Harris campaign should at the very least outline their plan for fostering crypto innovation on US soil. Talk of overly restrictive policies would certainly dampen market momentum.”
The Bottom Line
After speaking with some pro-crypto experts, Lian noted that the general sentiment within crypto circles is that Trump could win the current US presidential election, especially given the ongoing aftermath of Biden’s exit.
“To be very honest, I did a quick poll and most of my pro-crypto friends are all assuming that Trump will win. Most of them do not care about Harris. Maybe this is also an Elon Musk effect.”
Biden’s exit has definitely added a “wild card” to the election campaign, Cerus Markets’ Brescia added, making the outcome much harder to predict than ever before. On the contrary, he believes that the current events have led Trump’s odds of winning the election to decline.
One thing stands clear, however: no one can predict the direction of the crypto markets unless Harris opens up about her stance on crypto regulations.
Source: https://www.techopedia.com/what-does-biden-exit-mean-for-crypto
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.