Trump vs Harris marks a turning point for the cryptocurrency industry

In 2024, the cryptocurrency market has seen a surge in prices due to the approval of a Bitcoin spot ETF in the United States and the halving of Bitcoin (BTC). In addition, Ethereum (ETH) spot ETFs have officially begun trading in the United States, and discussions on cryptocurrency regulations are also becoming more active. Given these circumstances, it can be said that the cryptocurrency field is currently in a transitional period in the United States.

In this situation, the outcome of the US presidential election to be held in November has been attracting attention in the cryptocurrency market for some time. In particular, the actions of former Republican candidate Donald Trump have had a positive impact on the cryptocurrency industry since the beginning of 2024.

In the past, Trump dismissed Bitcoin as "a fraud" and was a representative of the "anti-cryptocurrency faction." However, he has now made a brilliant transition to become a cryptocurrency advocate, calling himself the "cryptocurrency president." Why has Trump's stance changed so dramatically in the last four years? The presence of social media is thought to be a major factor behind this.

Trump's Twitter (now X), which was his biggest platform for communication, was frozen due to his incitement of the attack on the Capitol in January 2021. Since then, he has been using the social media site "Truth Social" that he launched himself to communicate, but this alone has only had the effect of surrounding his supporters, and it is difficult to reach a wide range of people like X.

Therefore, he has set his sights on the cryptocurrency industry, which is compatible with social media sites such as X and has a meme-like enthusiasm. By promoting himself as a cryptocurrency advocate, he not only solidifies the so-called cryptocurrency vote, but also increases his exposure on X and other platforms, which were his former platforms for communication. In fact, Trump's actions and words, which are synonymous with radical remarks and performances, have made a striking impression on the cryptocurrency industry.

However, some people believe that his appearance of calling himself a cryptocurrency advocate with no trace of his former self and highlighting his closeness to the industry every day is merely an excessive performance. It should also be remembered that this is part of a strategy to raise election funds from the cryptocurrency industry, which is expanding its market size and becoming more abundant with funds. In light of this situation, we need to examine more closely whether Trump is really the "cryptocurrency president."

The initial outline of the presidential election was a rematch between President Biden and Trump. However, this scenario collapsed due to President Biden's repeated gaffes and concerns about his health due to his advanced age.

After that, President Biden announced his withdrawal from the presidential election, but as a parting gift, he nominated Vice President Kamala Harris as his de facto successor. In response to this move, Trump made a verbal attack, saying that "it is easier to fight than Biden," but the situation is now changing.

According to the decentralized prediction market "Polymarket," Trump was predicted to "win the presidential election" with a maximum probability of 72% after the day he was shot during an election rally on July 13. At the time, President Biden, who had not yet announced his withdrawal, had only a 17% chance of winning, and if things continued as they were, the presidential election would be a test of how big a margin of victory Trump would win.

However, the situation changed dramatically when Harris became the expected Democratic presidential candidate. The gap is narrowing rapidly, and in Polymarket's predictions, Harris is in hot pursuit of Trump, with a slight lead at the time of writing. In addition, polls by major US media outlets have shown Harris narrowly beating Trump. Trump has been sent in as a hidden contender, and the presidential election is once again shaping up to be a close race.

Looking at the pledges announced by Harris, who is now officially the Democratic candidate, there are many contents that continue the Biden line, as expected. Therefore, it is possible that this will be viewed as a negative image for the cryptocurrency industry, which has been tightening its grip up until now. In fact, there are already some opinions that are not favorable for the cryptocurrency industry as a scenario in which Harris is elected.

Therefore, if Harris' momentum increases, the cryptocurrency market may also become unfavorable. However, if Harris mentions cryptocurrency in her new pledges, the view will naturally change. If such a development occurs, the possibility of Trump introducing additional cryptocurrency-related policies may emerge.

In this special feature, we will organize and examine the campaign promises of both Trump and Harris, the current situation surrounding the presidential election, and the impact that their inauguration will have on the cryptocurrency industry.

The rising expectations for Harris that arose after President Joe Biden withdrew from the presidential election have not yet subsided. However, the Democratic Party's policy platform adopted by Harris was, as expected, a continuation of the Biden administration's major policies. The only thing that was emphasized was that Trump's name was mentioned more than 150 times and he was criticized, and Harris's own color was hardly seen.

The party platform, which is the de facto pledge, is about 90 pages long and further strengthens the stance against Trump, writing that "Trump's vision is focused on resentment and retribution, not opportunity and optimism." Furthermore, they strongly asserted that Trump will take away the freedom of individuals and women, increase the burden on workers, and cut social security.

In fact, the Republican Party platform led by Trump promotes crypto assets, which makes it seem more new in terms of vision than before, but does not mention such points. On the other hand, the Democratic Party's platform lists the basic policies of the Biden administration, such as "raising the bottom line of low-income earners and expanding the middle class" and "accelerating investment in reviving manufacturing and rebuilding infrastructure," and also includes climate change measures, which Trump has not considered to be particularly important.

In addition, regarding support for Israel, which is opposed by the younger generation, she advocated for a ceasefire agreement in the Palestinian-controlled area of ​​Gaza. She also expressed her opposition to the "two-state coexistence" of Israel and Palestine. However, she made no mention of the arms embargo against Israel, making her platform unconvincing.

Harris's main focus is on attracting young people, low-income earners, and minorities. Harris was a member of Alpha Kappa Alpha (AKA), a social club traditionally made up of black female students. This is a network that directly connects with 360,000 women across the United States. AKA members have effectively declared their support for Harris.

This will be a great force for the Democratic Party, whose main supporters are women and black people. The social club itself does not support the Democratic Party, but its members support Harris. On the other hand, Trump is losing support from black women, saying in an interview with the National Association of Black Journalists (NABJ) that Harris "claimed to be Indian, but suddenly became black. I didn't know she was black."

Regarding abortion, which is one of the issues in the current presidential election, he stated that "we will legalize it as a constitutional right and restore reproductive rights." Regarding the immigration issue, which Trump is fully promoting, he said he will aim to enact a bill to Congress to "strengthen border security, reform the refugee application system, and expand the acceptance of legal immigrants." The draft platform was approved by the Platform Committee of the Democratic National Convention before President Biden withdrew.

The platform is something that the Democratic Party has been researching and considering for several years, and it is also true that it cannot be easily changed. It repeatedly mentions the achievements of the Biden administration and plans for a second term, and harmony within the party is a priority. The Trump camp criticizes Kamala (Harris) for having no plan to solve the many crises she created, but in fact some of the policies of the Biden administration can be said to have been successful, so it is only natural that she would follow them.

Negative images such as the Israeli-Palestinian problem and rapid inflation are emphasized, but the fact that many Americans still have high expectations of the Democratic Party is also a factor in the extremely close presidential election. At the time of writing, the approval ratings of Trump and Harris are still neck and neck, and the outcome will not be known until the election is over.

However, the wind is about to change due to the TV debate in which Harris and Trump faced off against each other. This debate will be Harris' first valuable showdown with Trump since she became the Democratic candidate, and it will be of great importance in determining the future of the election campaign. In fact, President Biden made a terrible appearance in the TV debate and was forced to withdraw.

The debate was a development in which Trump criticized the Democratic administration with his specialty "verbal attacks" throughout, and Harris responded to them, with neither of them backing down. Nevertheless, Harris seemed to be in control of the pace of the debate from the beginning. As Harris is a former prosecutor, she seemed to be attacking while taking the developments into account.

On the other hand, Trump had a strong image of being on the defensive. According to CNN, in a survey asking "who won the debate," 63% supported Harris' victory. In the debate between President Biden and Trump held in June, 67% answered that Trump won, so it can be said that this is the exact opposite result. With this debate as a turning point, it is more likely that Harris will take the lead in the future.

Harris garners support for continuing Biden's path, but remains skeptical of cryptocurrencies

One of the failures of the Biden administration is said to be the extremely unusual crackdown on the cryptocurrency industry. Although Harris says she supports advanced technology, her words and actions show that she has a critical eye on the cryptocurrency industry.

One trend that shows Harris' skepticism of the cryptocurrency industry is that it has been revealed that she plans to nominate SEC Chairman Gary Gensler as Secretary of the Treasury if she becomes president. If Chairman Gensler becomes Secretary of the Treasury, it is easy to imagine that the next SEC Chairman will be someone close to Gensler, who will inherit Gensler's attitude toward the cryptocurrency industry.

If that happens, the environment for the cryptocurrency industry could become even more difficult. However, there are also moves within the cryptocurrency industry to get closer to Harris. Cryptocurrency investors and industry executives will hold a fundraising event in Washington on September 13th to support Harris. At the time of writing, the aim is to raise at least $100,000 in cryptocurrency.

Cleave Messidor, executive director of the Blockchain Foundation and one of the organizers, said tickets for the event will be between $500 and $5,000. The event's fundraising goal is small compared to the hundreds of millions of dollars Harris has raised since becoming the Democratic candidate, but there is a movement within the cryptocurrency industry to support Harris instead of Republican candidate Trump, who has tried to attract big donors by promising friendly policies.

The organizers include Tiffany Smith, co-chair of the Blockchain & Cryptocurrency Working Group at law firm WilmerHale. They hope that Harris' presidency will ease regulations on cryptocurrencies.

In addition, when asked about Harris's response to the cryptocurrency industry at a Bloomberg News roundtable held at the Democratic National Convention, Brian Belson, senior policy adviser to the Harris campaign, said, "(Harris) will support policies that allow new technologies and related industries to continue to grow." The fact that the Harris campaign has not made any comments on this is still a factor that raises doubts about her stance on the cryptocurrency industry. However, Harris' team also indicated that they are still interested in introducing safeguards for the cryptocurrency industry.

In her speech in North Carolina outlining her economic policies, Harris did not mention cryptocurrency at all, but stated that if elected president, she would "focus on reducing unnecessary bureaucracy and red tape." She also said that she would support "innovative technologies that protect consumers with consistent and transparent rules and create a stable business environment."

However, it is unclear whether this refers to cryptocurrency. Harris is working hard to solidify the votes of low-income and middle-class people and minorities. Therefore, unlike Trump, it is clear that she does not place importance on the cryptocurrency industry's votes.

If SEC Chairman Gensler becomes Treasury Secretary, the cryptocurrency industry could face even more pressure

In contrast to Harris, Trump has declared his support for cryptocurrencies, and people close to the Web 3.0 field support him. Representative figures include Elon Musk, Peter Thiel, a16z founder Andreessen Horowitz, and Oracle CEO Safra Katz. Katz is on the executive committee of President-elect Trump's transition team, and it has been revealed that Musk is donating $45 million (about 7.1 billion yen) per month to the Trump campaign.

Vice presidential candidate J.D. Vance served as a manager at Peter Thiel's fund. Vance is also known as a person who is active in cryptocurrency-related policies, and Trump is seriously trying to establish a system to make the United States a cryptocurrency powerhouse if he is elected.

In addition, if Trump is elected, it is highly likely that SEC Chairman Gensler will be immediately dismissed, and it can be said that it is a given that a cryptocurrency-supporting chairman will be appointed after that. This will be a big boost for the cryptocurrency industry, and it can be said that it will be a major catalyst for a significant increase in the price of cryptocurrencies, including Bitcoin.

Trump has stated that he will support mining companies and make the United States the world's number one in new Bitcoin mining. He has also stated that the US government will strategically hold cryptocurrencies, relax regulations on cryptocurrency issuance and related applications, and ease the ETF approval process, as well as tax cuts on the sale of cryptocurrencies.

If Trump is elected, the cryptocurrency industry will be revitalized and the United States will clearly reign as the leader in the cryptocurrency field. The Democratic Party has not changed its skeptical stance on cryptocurrencies, and it is said that there are more cryptocurrency naysayers among Democratic supporters than Republican supporters, so it is very unlikely that Harris will change course to support cryptocurrencies.

Although Soros, a supporter of Harris, has incorporated crypto assets into his fund, Soros himself is skeptical of crypto assets, saying, "Bitcoin is not a currency, because a currency should have a stable value. It's just speculation based on a misunderstanding," and Buffett still claims that crypto assets are delusional.

However, Soros also acknowledges that blockchain is "an innovative technology with many possible applications." As Harris's supporters and major investors are not enthusiastic about crypto assets, it seems that Harris cannot actively support crypto assets either.

On the other hand, many of the people surrounding Trump are pro-crypto assets, and his election may accelerate businesses that utilize crypto assets. The industry also still has no change in its view that the best scenario for the time being is for Trump to win.

If Harris is elected, the crypto asset industry will not decline, but it is difficult to imagine any dramatic development. If anything, it is easier to imagine crypto asset companies expecting the traditional stance to be inherited moving their activities outside the United States, which is likely to result in a negative impact on the promotion of innovation for the United States.

His latest pledges do not mention crypto assets either, only mentioning that he will continue to work to ensure that the United States remains a leader in cutting-edge technologies such as semiconductors, clean energy, and AI. As mentioned above, Harris is one of the people at the center of the Biden administration who led the crypto asset denial policy, and considering the supporters behind her, only negative images remain for the industry.

It would be better for the crypto asset industry if Trump were elected. Trump has already called himself the "crypto asset president," and based on his past words and actions, he can be viewed as a much more positive view of the industry than Harris. There is a high possibility that economic policies will be significantly changed from the current situation, and while the trends of traditional finance must also be taken into consideration, there is a possibility that this will significantly boost cryptocurrency prices.

However, the situation surrounding Trump is becoming more severe day by day. Expectations for Harris, who is younger than Trump and would be the first female president if elected, are far greater than initially expected. It goes without saying that Harris' election will bring a certain sense of renewal to US politics.

Depending on the results of the presidential election, the future of the cryptocurrency industry will be a world apart. It is inevitable that this presidential election will be one in which the situation is completely unclear until the end, and the cryptocurrency market may remain weak until the conclusion in November. This US presidential election is likely to be an event that the cryptocurrency industry cannot take its eyes off of more than ever before.

Short Column

No matter what the outcome of the US presidential election, will it be beneficial for Japan's Web 3.0?

Whether the new US president is Trump or Harris, it could have a positive effect on Japan's Web 3.0 industry.

If Trump is elected, it is expected that the movement surrounding crypto assets will accelerate in the US, which could lead to accelerated discussions on crypto asset ETFs and tax reform in Japan as well.

If Harris is elected, Web 3.0-related activities in the US may stagnate, and some companies may move their bases overseas. If this happens, competition related to Web 3.0 will intensify in various countries, including Japan, and there is a possibility that the growth of the industry will be boosted.

Trump is promoting the development of the industry by surrounding himself with cryptocurrency supporters

Trump, who is currently in the midst of a fierce battle in the US presidential election, has recently announced a new Web 3.0 project. It's called "World Liberty Financial." It's a decentralized finance (DeFi) project that allows borrowing and lending through crypto assets.

Strictly speaking, the project is led by Trump's family, but Trump made a bold statement in the announcement, saying, "We will embrace the future with crypto assets and leave outdated banks behind." It is unclear how much it will affect the US presidential election, but with the issuance of a unique token also being considered, it is expected to attract more and more attention in the future.

Key points if Trump becomes president

1. There is a possibility that regulations on crypto assets, including Bitcoin, will be relaxed. The US government is expected to purchase Bitcoin as part of its reserve fund and support mining companies.
2. There is a very high possibility that SEC Chairman Gensler will be fired immediately. After that, a person who is knowledgeable about crypto assets will become SEC Chairman, and the regulatory environment may improve.
3. In connection with preferential tax rates for the wealthy and corporations, there is a possibility that funds will flow into crypto assets. In particular, there is a possibility that trading of physical ETFs will become even more active.

Key points if Harris becomes president

1. Since she will take over from Biden, the stance on crypto assets may remain the same or may lean towards strengthening regulations. As regulations become more strict, more companies may move their bases outside the US.
2. There is a possibility that Chairman Gensler, who has been tightening regulations on the crypto asset industry, will become Secretary of the Treasury. In that case, it is expected that the new SEC Chairman will also be someone who takes a tough stance on crypto assets.
3. In contrast to Trump, Harris has announced that he will strengthen taxes on capital gains for the wealthy, which may lead to an outflow of funds from the market. On the other hand, there is a possibility that the inflow of funds from the middle class and others will increase.

Taking into account policies to promote innovation and tax systems, a Trump victory is a positive scenario for the industry.