U.S. Election Impact: Trump or Harris—Who Will Boost Crypto and Stocks?

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With a gripping race developing between Donald Trump and Kamala Harris, the US Presidential elections are just around the corner. Investors are anxiously watching how the stock markets and crypto markets might turn out.

There’s a buzz that if Trump wins, we could see the stock market going green and bullish cryptocurrencies soaring even higher. But hold on—polls and betting odds show a nail-bitingly close race ahead. This election is shaping up to be an exciting ride, and it could significantly impact the economy and financial markets.

Here’s what you need to know.

Why Is Crypto in the Spotlight for the 2024 Elections?

The 2024 U.S. presidential election represents a turning point for the global crypto and blockchain industries. For the first time, cryptocurrency is taking center stage in a U.S. election, with both candidates openly discussing their views on digital assets. This reflects the growing significance of crypto in political conversations.

Can you believe that nearly half of the corporate contributions to this election are coming from the crypto sector? This shows just how much the industry craves regulatory clarity. As we approach election day, all eyes are on how each candidate’s policies could reshape the digital asset world. Trump is throwing his support behind crypto, while Harris, though also pro-digital innovation, emphasizes the need for protecting consumers and investors.

The crypto industry has faced numerous SEC actions under Gary Gensler, who has raised concerns about investor risks. Trump plans to remove Gensler, while Harris hasn’t indicated she would take the same approach.

Political Impact on the Crypto Markets

It works both ways!

The upcoming elections are adding a new layer of volatility to the crypto markets. Sure, there’s growing institutional interest and potential Fed rate cuts in the mix, but this election could be a game-changer for the current bullish environment in crypto.

Standard Chartered is feeling optimistic, predicting Bitcoin could hit $73,000 by election day—and it might even break past $80,000 if Trump takes the win.

Experts believe that a Trump win in the November 2024 polls is likely to benefit Indian auto, energy, and metal sectors, and could be neutral for the pharmaceutical space. The Indian Information Technology (IT) sector, a major beneficiary of US demand, is expecting a Republican win, given former President Trump’s restrictive stance on the H-1B visa program, as per the report. 

What Will Happen to Bitcoin if Trump Wins?

This election cycle, Trump is really leaning into his role as the “crypto candidate.” He’s even started accepting campaign donations in various cryptocurrencies like Bitcoin, Ether, Dogecoin, and Solana. How cool is that?

Trump has made a bold promise to fire SEC Chair Gensler on his first day in office. This is music to the ears of crypto enthusiasts, given Gensler’s controversial policies. Plus, Trump has proposed creating a national Bitcoin reserve, turning Bitcoin into a central theme of his campaign and generating excitement among his supporters.

If Trump wins, we could see Bitcoin prices shoot up, which would likely boost the entire crypto market.

Trump’s Priorities & Game Plan – What to Expect

Should Trump emerge victorious, analysts predict that countries like Israel, Russia, Saudi Arabia, India, Australia, and Japan could benefit from his policies, while China, Iran, Mexico, and Ukraine might not fare as well.

Trump has his sights set on tackling inflation and making America more affordable again. However, economists warn that his commitment to higher import taxes could drive prices up.

He’s also promised to extend the significant tax cuts he implemented in 2017, primarily benefiting the wealthy. And let’s not forget his focus on completing the border wall and tightening immigration, which would shape his overall agenda.

Tariffs are central to Trump’s campaign, with plans for new 10-20% tariffs on most foreign goods and even higher rates on Chinese imports. He wants to encourage companies to keep manufacturing in the U.S. by offering lower corporate tax rates.

What Will Happen to Bitcoin if Harris Wins?

Kamala Harris is stepping into the spotlight too, recently making waves with her discussions on cryptocurrency. She’s advocating for stronger regulatory oversight to ensure consumer protection and financial stability.

Many experts believe that if Harris wins, we might see a slight dip in leading cryptocurrency prices initially, followed by a potential rebound. A Harris administration could bring in increased regulatory scrutiny, especially concerning private capital and crypto markets.

Analysts at Rabobank International suggest that a Harris victory could help keep inflation on track towards the Fed’s 2% target, allowing for continued rate cuts into 2025.

Harris’s Priorities & Game Plan – What to Expect

Harris has stated that her day-one priority would be trying to reduce food and housing costs for working families. She has also emphasized her experience as a prosecutor in California taking on human traffickers. She has pledged, if elected, to ensure that it is the US and not China that wins “the competition for the 21st Century”.

As a supporter of a two-state solution between Israelis and Palestinians, she has called for an end to the war in Gaza. Interestingly, she’s criticized Trump’s sweeping tariff plans, calling them a tax on working families that could cost households an extra $4,000 a year.

Harris is expected to take a more targeted approach to tariffs, maintaining the Biden-Harris administration’s tariffs on specific Chinese imports, like electric vehicles.

The Bottom Line? Tax Rates

According to Bank of America, Trump’s plan to cut the corporate tax rate from 21% to 15% could boost corporate earnings by 4%. How different sectors respond will depend on their sensitivity to tax rate changes.

On the flip side, Harris wants to hike the corporate tax rate to 28% from 21%, which could negatively impact earnings. But there’s a silver lining; her focus on building 3 million homes could boost homebuilder stocks. Renewable energy stocks might also thrive under her administration, given the Democrats’ support for wind and solar energy.

Bank of America points out that as long as corporate profits keep growing, the stock market will likely rise, no matter who wins the White House.

The Bond Market’s Reaction

The U.S. bond market’s performance hinges on interest rate trends.

If Trump wins, we might see interest rates climb, which could drive bond prices down. But if Harris comes out on top, we could expect rates to drop, benefiting bonds, as she wouldn’t pursue inflationary policies like tariffs or aggressive immigration strategies that could push up wage inflation.

Who’s Gaining More Support?

Interestingly, both U.S. and Indian equities rallied during Trump’s first term and Biden’s administration. Bloomberg data shows the S&P 500 and NASDAQ surged by 70.2% and 142.9%, respectively, under Trump, compared to gains of 50.8% and 36.8% under Biden.

Right now, Polymarket gives Trump a 59.5% chance of winning the election, while Harris sits at 40.5%. Trump is enjoying strong support from the crypto community, but Harris is also winning over some notable crypto figures.

Trump has received backing from heavyweights in the crypto world, including executives from major exchanges like Kraken and Gemini. Elon Musk has even shown his support by appearing at several of Trump’s rallies.

Despite entering the race later, Harris has also attracted attention from key crypto figures, like Ripple co-founder Chris Larsen, who endorsed her in early September.

All in All… Here’s What to Expect

Regardless of the election’s outcome, U.S. crypto policy is set to have a global impact. Both Trump and Harris recognize the importance of crypto, suggesting that digital assets are becoming a bipartisan issue. The real question isn’t if there will be U.S. crypto regulation, but how it will be rolled out to keep the country at the forefront of the digital economy.

Crypto enthusiasts believe that the sector will continue to grow, no matter who wins. Coinbase CEO Brian Armstrong argued in August that the incoming administration will be “constructive” on crypto, regardless of party affiliation.

So, as we count down to the elections, investors should stay alert and be cautious before making any moves. Keep an eye on market trends, as volatility is sure to be on the rise!

As the election draws near, which candidate do you think will be the best ally for the crypto community? Drop your opinions.