Bitcoin Price Declines Following Presidential Debate as Trump Faces Crypto Concerns
Bitcoin's value experienced a decline on Wednesday, coinciding with the aftermath of the recent presidential debate and a broader downturn in risk-driven assets.
The second presidential debate of the 2024 election cycle took place on Tuesday night, featuring Vice President Kamala Harris and former President Donald Trump. The debate was marked by aggressive exchanges, especially after President Joe Biden, who was initially the presumptive Democratic nominee, withdrew from the race following a lackluster performance in the first debate.
In a poll conducted by Newsweek after the debate, readers overwhelmingly favored Harris, with a 2-to-1 margin over Trump.
The debate, held in Philadelphia at 9 p.m. ET, saw Bitcoin's price drop by 1.2%, settling at $56,258 by 1:58 a.m. The decline in Bitcoin's value was mirrored across the cryptocurrency market, with ether also experiencing a dip of 0.8%, falling to $2,330.17, as reported by Investing.com.
The heightened competition for Trump has raised concerns among crypto marketers, particularly given his previous vocal support for the cryptocurrency sector and the uncertainty surrounding Harris' position on the matter. Notably, cryptocurrency was not mentioned during the debate, and Trump did not include it in his economic policy discussions.
Bitcoin has faced significant volatility recently, having dropped to $52,000 just last week. Trump's evolving stance on cryptocurrency is noteworthy; he initially criticized it in 2021, labeling it a "disaster waiting to happen," but later embraced it, announcing in March that his campaign would accept cryptocurrency donations. He has since pledged to "build a crypto army" to support his campaign leading up to the November 5 election.
During a speech at the Economic Club of New York on September 5, Trump expressed his ambition to establish the U.S. as the global hub for cryptocurrency, stating, "Instead of attacking industries of the future, we will embrace them, including making America the world capital for crypto and Bitcoin."
Economic historian and cryptocurrency researcher Garrick Hileman commented on the situation, noting that the modest drop in Bitcoin's price aligns with shifts in prediction markets that favored a Harris victory by 3 percentage points. He emphasized that the crypto market perceives Trump as the more favorable candidate for Bitcoin, suggesting that Harris' performance may have influenced market sentiment.
David Gerard, author of "Attack of the 50 Foot Blockchain," shared a similar perspective, arguing that the debate likely did not have a significant impact on Bitcoin's price. He explained that the cryptocurrency market operates differently from regulated securities or commodities, being more susceptible to internal manipulations than broader economic signals. He pointed out that trading volumes on Binance, particularly for BTC/USDT and BTC/FDUSD pairs, dominate price setting in the market.
Harris has yet to publicly address cryptocurrency regulation. The Biden administration has taken a tougher stance on digital assets since 2022, with Biden signing an executive order that outlines a national policy for digital assets focusing on consumer protection, financial stability, and responsible innovation, among other priorities.
The potential impact of the election on cryptocurrency values remains a topic of debate. Hileman noted that the election's significance may be overstated, as the crypto industry has continued to grow and see price increases since Biden's inauguration in January 2021.
Earlier this year, Trump acknowledged his shift in perspective on cryptocurrency, stating that he was hesitant to eliminate it given its increasing entrenchment in the economy. In a speech to Libertarians in May, he reiterated his support for crypto, vowing to "stop Joe Biden's crusade to crush crypto" and ensuring that the future of Bitcoin remains in the U.S.
Hileman concluded that regardless of the election outcome, Bitcoin's presence in the market is secure, although certain companies and tokens may face regulatory challenges depending on which candidate wins. He noted that some players in the crypto industry are backing Trump, believing he would favor lighter regulations and potentially support a U.S. strategic Bitcoin reserve, although the merits of such policies are debatable.
This article was updated on September 11, 2024, to include comments from Garrick Hileman and David Gerard.