Impact of the 2024 US Elections on the Cryptocurrency Market: Expert Insights
The United States is currently at a pivotal juncture, with several key factors poised to influence financial markets, particularly the cryptocurrency sector. As the Federal Open Market Committee (FOMC) meeting approaches in September and the November elections draw near, all eyes are on the U.S. These events hold significant implications not only for traditional markets but also for crypto enthusiasts who are advocating for legislative changes to ease regulations within the cryptocurrency landscape.
This year has proven to be transformative for the cryptocurrency market. Bitcoin has reached unprecedented all-time highs, and the recent approval of spot Bitcoin and Ether exchange-traded funds (ETFs) in the U.S. marks a substantial step towards mainstream acceptance. These developments highlight the growing integration of digital currencies into the global economy, which is likely to attract increased political and regulatory scrutiny as the elections approach.
Experts suggest that the introduction of crypto ETFs has primarily enhanced the legitimacy of the cryptocurrency space. However, some users argue that their most significant impact lies in driving market inflows. Regardless of the perspective, the upcoming U.S. Presidential elections are expected to play a crucial role in shaping both viewpoints. Should pro-crypto candidates emerge victorious, their influence could serve as a major catalyst for market movements, with the President's policies significantly affecting overall market sentiment.
Subho Moulik, Founder & CEO of Appreciate, notes, “Historical data dating back to 1927 indicates that the incumbent party loses approximately 70% of the time when elections occur during a recessionary year. Furthermore, incumbents typically face defeat when the economy enters a recession within the 12 months following the election. What sets this election apart is that the primary concern is not economic growth, which has been strong in recent quarters, but rather prices and inflation, which have proven challenging to manage and have impacted affordability and disposable income.”
Avinash Shekhar, CoFounder & CEO of Pi42, emphasizes that U.S. elections are likely to significantly influence investor sentiment, regulatory frameworks governing cryptocurrencies, and the overall advancement of digital assets. He asserts that the elections will play a crucial role in shaping the future of digital assets, blockchain technologies, and the broader cryptocurrency ecosystem.
As 2023 progresses, it has already been a landmark year for cryptocurrencies, with Bitcoin achieving record highs and the approval of Bitcoin and Ether ETFs. These milestones reflect a growing interest in digital currencies while simultaneously setting the stage for increased regulatory focus as the elections approach.