Original title: "The election is approaching. If Harris comes to power, what huge changes will the crypto industry usher in?"

Original author: Alvis, Mars Finance

As the 2024 US election approaches, the tension in the capital market has reached a critical point, and the cryptocurrency market is even more thrilling. This year, Trump, who has experienced a life-and-death crisis, ran for office in a high-profile manner. The bold statement of "making the United States the capital of crypto" instantly ignited the enthusiasm of the crypto circle. However, history has repeatedly reminded us that subtle changes in policies often become a watershed in the market.

Looking back at the "New Deal" after Roosevelt came to power in 1933, overnight, the economic rules of the United States were completely reshaped, a large number of companies were forced to adapt to the new policy direction, and the market structure was reshuffled and reorganized. And this time, the cryptocurrency industry may be facing the same fate. As Harris steadily advances in the campaign, her highly consistent policy stance with Biden means that the current government's anti-crypto regulation may continue to increase. For a crypto market that advocates freedom and decentralization, this policy direction may be a real life-and-death test.

So, if Harris is elected, what will be the future of cryptocurrency? What opportunities can not be ignored? We will analyze these questions in depth.

According to the prediction website Polymarket, Trump's chance of winning is currently 62.5%, while Harris's chance of winning is only 37.5%. Although the prediction market believes that Trump has a higher chance of winning, Forbes' October 31 poll shows that Harris leads Trump by a narrow margin of 1% nationwide, and 10% of voters may change their positions before the election.

In the seven key swing states that determine the outcome of the election, Harris's support rate is 49%, slightly ahead of Trump's 48%. Just a week ago, Trump led Harris in these states by 50% to 46%.

Therefore, although many crypto supporters are more optimistic about Trump's election, Harris may still succeed.

Unfavored but eventually overtaken "reversal" presidents in history

There have been many cases in American history where candidates who were not favored at the beginning of the campaign and even underestimated by the polls eventually succeeded in a comeback.

· In 1948, Truman was one of them. Polls showed that he was behind Republican candidate Thomas Dewey. The media and polling agencies even announced Dewey's victory in advance, and some newspapers also printed the headline "Dewey defeated Truman". However, Truman adopted a series of intensive campaign activities, directly targeting voters, emphasizing the achievements of the Democratic Party in economic and social policies, and finally won the election. This election is considered a classic case of inaccurate polls.

· In 1992, Clinton was not a popular candidate in the Democratic Party during the election. In the early stage of the campaign, he suffered a downturn due to a series of negative reports and scandals. Many experts predicted that he would have a hard time making it to the end. However, due to his flexible campaign strategy, ability to communicate with the people, and the economic difficulties at the time, he gradually gained support. In the end, he defeated then-President George H. W. Bush and third-party candidate Ross Perot in a three-way election and was successfully elected.

· In 2016, Trump himself also staged a big reversal. When Trump ran for election, he was not only regarded as a "hopeless" candidate in the Republican primary, but was also seriously underestimated by mainstream polls in the final election against Hillary Clinton. During the campaign, Trump won the support of a large number of voters with his strong populist style and appeal to the middle and lower classes of the United States, especially in swing states. He performed very well and eventually won the election.

From this point of view, don't make a conclusion before the voting results are really announced. Just as Bitcoin encountered a black swan event when it was at its peak, no one can predict the final result of the election in advance.

Harris's election: Is it a disaster or a market adjustment? Market opinions are polarized

First of all, we have to admit that if Harris is elected, there is a high probability that he will continue the policy tone of the Biden era. At this moment, the hearts of cryptocurrency investors are a bit like a roller coaster.

Analysts at the well-known analysis company Bernstein have predicted that if Harris wins, the price of Bitcoin may fall significantly by the end of the year, and may even fall by 10%.

On the other hand, Crypto Rand, a veteran trader in the cryptocurrency field, is much calmer. He believes that no matter who enters the White House, the general direction of the crypto market will not change, and the bull market will eventually come, but there may be some bumps on the road.

So, there are two key points here: first, Biden-style policies are unfriendly to cryptocurrencies, and second, the market is speculating whether Harris will increase regulation, which will cause greater uncertainty.

Crypto Rand said that even so, Bitcoin may bottom out in 2025, driving the entire market towards a new round of bull market. These predictions are not groundless, because whether it is Bitcoin or altcoins, the ups and downs of the crypto market have long become the norm. And for some staunch supporters, this is just a short-term fluctuation and does not represent a reversal of the overall trend.

Continuation of regulatory policy: Gary Gensler's "enforcement supervision" and the Biden administration's regulatory path

We need to have a deep understanding of how the Biden administration treats cryptocurrencies so that we can more accurately predict Harris' policy direction. Since Biden took office, the U.S. Securities and Exchange Commission (SEC) has started the "enforcement and supervision" mode under the leadership of current Chairman Gary Gensler, especially for the cryptocurrency industry, which can be said to be ruthless. The SEC not only filed lawsuits against large exchanges such as Binance and Coinbase, but also thoroughly tracked down unregistered cryptocurrency securities. It is generally believed in and out of the market that Gensler's regulatory approach has obvious high-pressure characteristics. He has become the "guardian of order" in the crypto market on his own, but his methods have also caused a lot of controversy, and some people even accuse him of being a "disruptor" in the market.

The following is a chronological review of some of the regulatory bills and enforcement actions during Biden's term from the beginning of 2021 to 2024:

2021

· March: The Financial Crimes Enforcement Network (FinCEN) under the U.S. Treasury Department proposed a proposal to strengthen anti-money laundering (AML) and "know your customer" (KYC) requirements for cryptocurrencies, aiming to curb the use of cryptocurrencies in illegal activities.

· August: The Commodity Futures Trading Commission (CFTC) filed a lawsuit against the cryptocurrency trading platform BitMEX, accusing it of failing to implement appropriate anti-money laundering and KYC measures. In the end, BitMEX agreed to pay a $100 million fine and reached a settlement with the CFTC.

2022

· February: The SEC filed a lawsuit against crypto lending platform BlockFi, accusing it of failing to register its income account products as securities. Ultimately, BlockFi agreed to pay a $100 million fine.

· March: President Biden signed an executive order on digital assets, requiring federal agencies to coordinate the development of a cryptocurrency regulatory framework aimed at protecting consumers, maintaining financial stability, combating illegal activities, and exploring the possibility of a U.S. central bank digital currency (CBDC).

· June: The U.S. Department of Justice established the National Cryptocurrency Enforcement Team, which immediately intervened in a number of cases after its establishment, including tracking down the cryptocurrency assets of the "Silk Road" illegal trading platform and assisting in tracking international cases of illegal transfers of crypto assets.

· September: The U.S. Treasury Department issued three reports on digital assets, focusing on the risks of cryptocurrencies in illegal finance, consumer protection, and payment systems, and further clarifying the government's regulatory stance on cryptocurrencies.

· October: The SEC began investigating Yuga Labs' NFT project Bored Ape Yacht Club (BAYC) due to concerns that its tokens may involve unregistered securities sales.

· December: After the FTX bankruptcy, the CFTC, the SEC, and the Department of Justice jointly launched an investigation into FTX to find out whether it has abused customer funds, illegally misappropriated funds, and engaged in fraud.

2023

· May: Bipartisan members of the U.S. Congress proposed the "Crypto Tax Fairness Act", proposing to implement capital gains tax exemptions in small transactions to promote the daily use of cryptocurrencies and ensure that the industry is not suppressed by a complicated tax system.

· August: The SEC filed a lawsuit against large cryptocurrency exchanges Binance and Coinbase, accusing them of not registering as securities exchanges and that some crypto assets are considered unregistered securities. The SEC's action is seen as a comprehensive cleanup of the cryptocurrency market, especially stricter compliance requirements for trading platforms that do not comply with securities laws.

· September: The Biden administration expressed its intention to further review all crypto assets that use the Proof of Stake (PoS) mechanism and intends to define them as securities. The SEC began to strengthen its supervision of PoS assets such as Ethereum, saying that they are similar to the voting rights structure of traditional stocks and may need to comply with securities laws.

· November: Binance agreed to pay a $4.3 billion fine to settle the US government's years-long investigation into it. Binance admitted to participating in suspected money laundering, unlicensed money transmission and sanctions violations. At the same time, founder Zhao Changpeng (CZ) admitted to failing to maintain an effective anti-money laundering program and resigned as CEO.

2024

· April: Zhao Changpeng was sentenced to four months in prison by the US Federal Court in Seattle for violating US anti-money laundering laws (now released).

· May: The U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act (FIT21), laying a legal foundation for the regulation of digital assets and further clarifying the regulatory responsibilities of the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC), especially in the management and supervision of crypto assets and digital financial products. The FIT21 Act is seen as an important foundation for the federal regulatory framework for digital assets.

· June: The U.S. Treasury Department issued a final rule requiring all cryptocurrency platforms to report user transaction details to the U.S. Internal Revenue Service (IRS) starting in 2026, with the aim of tightening regulation of cryptocurrencies in the tax field and reducing tax evasion.

These events and bills undoubtedly show that the Biden administration's attitude towards cryptocurrencies is generally biased towards strong regulation. Under Gary Gensler's leadership, the SEC has adopted an "enforcement and regulation" approach to bring the cryptocurrency industry into a stricter legal framework, requiring market participants to comply with compliance standards.

It is worth noting that Gary Gensler's future role is currently unresolved. Although Trump has promised to fire Gensler on "Day One" if elected, he cannot directly decide whether the SEC chairman stays or goes. Harris has not yet made a formal statement on Gensler's re-election, and market analysts generally believe that Gensler's "enforcement and regulation" strategy may encounter resistance.

Crypto Rand, a well-known cryptocurrency analyst, bluntly stated that Gensler's policies are "the biggest burden on the US cryptocurrency industry."

Rashan Colbert, policy director of dYdX, a decentralized trading platform in the United States, also pointed out that if the new government can replace the chairman of the SEC, it will mark the end of law enforcement overreach and harmful regulation, which may help the compliance development of the crypto market.

Billionaire investor Mark Cuban also expressed doubts about Gensler's law enforcement approach. He believes that Harris's team tends to oppose the "law enforcement and regulation" model and hopes to promote the development of the crypto market through a clear regulatory framework.

Cuban pointed out that Harris "prefers clear regulatory provisions rather than litigation", which allows companies to avoid moving overseas to develop applications.

Other industry observers believe that even if Harris replaces Gensler, the enforcement of the cryptocurrency market will not weaken. Venture capitalist Tim Draper went further and called for a complete update of U.S. securities laws, pointing out that the current Howe rules were established 80 years ago and are no longer adapted to the "dynamic, growing modern market environment." The real turning point lies in whether industry uncertainty can be reduced through more transparent and clear regulations. This is of great concern in the market because a clear regulatory framework can help companies and investors make more stable arrangements, rather than feeling like they are walking a tightrope every time a policy is released.

Global Liquidity and Market Opportunities: Will Loose Monetary Policy Become a Bull Market Driver?

Bit Mining's Chief Economist Yang Youwei pointed out that if Harris is elected, cryptocurrency investors should pay special attention to monetary liquidity in the global economy.

Here is the key point: Will so-called "hot money" flow into the crypto market again and become a catalyst for a new round of bull market? Yang Youwei's point is clear: the looser the monetary policy, the greater the possibility of capital inflow into the crypto market. Given the current uncertainty in the global economy and the loose policies generally adopted by central banks, the inflow of hot money may indeed bring more market opportunities.

Correlation between Bitcoin prices and global liquidity. Source: Lyn Alden

Also supporting this view is cryptocurrency entrepreneur Erik Finman. He believes that if the Fed takes a more accommodative stance under Harris' leadership, then even if regulatory challenges exist, increased market liquidity will still support prices. In other words, the further Harris' policies go on the path of "loose money", the greater the bull market potential in the crypto market.

However, the premise of all this is whether the United States can withstand greater inflationary pressure. It is foreseeable that if Harris tries to continue to implement loose policies, she will inevitably encounter considerable fiscal pressure and market resistance. In this case, companies and investors must be wary of the volatility risks in the crypto market and should not easily ignore the chain reaction brought about by monetary policy.

Lack of clear policies triggers panic: Will the US crypto industry be "geo-fenced"?

For many crypto market participants, one of Harris' major flaws is her unclear attitude towards cryptocurrencies. In September of this year, Harris publicly stated for the first time that her government would encourage investment in artificial intelligence and digital assets to maintain the competitiveness of the United States. However, it is obvious that such a statement lacks details and cannot reassure the market at all. This ambiguity has caused many people to worry that she may continue Biden's hard line, thereby increasing market uncertainty.

Venture capitalist Tim Draper pointed out that "fear" has begun to spread in the industry at this stage, especially for small crypto companies that are more sensitive to uncertainty. Instead of wavering on the regulatory policies of the United States, more and more companies are choosing to go overseas directly to seek a clearer policy environment. At present, the policies of countries such as Dubai and Singapore are more relaxed and clear than those of the United States, and the phenomenon of "geo-fencing" in the United States is emerging. Colbert, the policy director of the famous decentralized platform dYdX, further added: "Other countries are moving faster than the United States. If the new US government is unwilling to remain competitive in the field of cryptocurrency, this trend will continue." Even if the Harris government relaxes policies in some aspects in the future, the lack of systematization and clarity will inevitably push innovators to a more inclusive market.

Top 10 countries in the 2024 Henley Cryptocurrency Adoption Index. Source: Henley & Partners

The 2024 Henley Cryptocurrency Adoption Index, released by investment immigration consulting firm Henley & Partners, ranks the cryptocurrency adoption status of different countries, ranking the United States behind the United Arab Emirates, Hong Kong and Singapore.

Despite this, most large cryptocurrency companies have not left the United States. Despite the unfriendly attitude of regulators in the past few years, the US market is indeed too tempting for many crypto companies to leave.

From this point of view, if Harris is elected president, the market obviously needs clear and strong policy signals to stabilize investor confidence. The current chairman of the US Securities and Exchange Commission has caused widespread controversy with his tough regulatory approach, and the market generally expects that Harris may choose a new leader after taking office to ease industry dissatisfaction.

But the real challenge is whether the Harris administration can find the ideal balance point - both protecting the basic security of the market and promoting the vigorous development of the industry. Under a looser monetary policy, if a stable policy environment can be provided, the potential of the crypto market will undoubtedly be released.

Dogecoin in market volatility and the crypto "shouting king" Musk

In the turbulent world of cryptocurrency, Dogecoin has always been an "outlier". Unlike mainstream crypto assets such as Bitcoin and Ethereum, Dogecoin is not only highly volatile, but also has a playful and self-deprecating temperament. Who would have thought that this cryptocurrency, which was originally a joke, would set off a global frenzy under the leadership of Musk. And this "shouting king" Musk has long been the spokesperson for Dogecoin. Whether it is personal tweets or Tesla's income and expenditure management, he has frequently brought Dogecoin into the mainstream vision, and used his personal influence to open up a road for this niche project.

Dogecoin has risen as much as 80% in the past month

Then the question is: If Trump wins the 2024 US election and Musk is in charge of the so-called "Department Of Government Efficiency" (DOGE), the Dogecoin market will undoubtedly be more lively. But what will happen if Trump loses and Harris is elected?

Harris' policy stance has always been vague, which is not good news for the cryptocurrency market, especially for highly emotional Dogecoin investors.

Cryptocurrency analyst Crypto Rand predicts that if Harris is successfully elected, market panic may spread rapidly. Since Dogecoin investors tend to be more short-term sentiment-driven, once the policy is unclear, the market may enter a short-term selling mode. In other words, the price of Dogecoin is likely to experience a "free fall", and if this panic is not dissipated in time, it will bring deeper market fluctuations.

Musk: Standing on Trump's side and his "puppet theory" of Harris

Having said that, Musk's own performance in this election is also very eye-catching. As a "calling king" who dares to speak and act in the technology circle, he clearly stood on Trump's side this year and even spent millions of dollars to support his campaign. By setting up a lottery with high prizes, he intends to encourage more voters to participate in the vote, especially in key states where the election is deadlocked. The Tesla CEO not only spoke out through his social media influence, but also directly supported the campaign through the American Political Action Committee (PAC), sparing no effort to stand on Trump's side.

More topical is Musk's view on Harris. In public, Musk has mercilessly called Harris a "puppet" and said that Harris does not have real decision-making power. In his remarks, Harris is considered a "front-stage puppet" - a political tool who lacks substantive decision-making power. Musk's behavior of standing in line with all his strength as the top American billionaire is extremely rare in American history, so Musk can't help but have that "heartfelt words" - if Trump fails this time, I may be arrested and lose everything I have.

Dogecoin market "emotional panic" and future risks

Compared with Bitcoin and Ethereum, the market structure of Dogecoin is more dependent on emotion-oriented. Once investor confidence is unstable, it is very easy to form a large-scale selling wave. In the past, with Musk's support, the price of Dogecoin tended to fluctuate rapidly in a short period of time, but if Harris comes to power and the policy is unclear, whether Musk's influence can be maintained still needs to be questioned.

Especially in the context of Tesla's third-quarter financial report, financial performance gradually stabilizing, and Bitcoin holdings remaining unchanged, whether Musk's enthusiasm for Dogecoin will be affected by the political situation has also become a focus of market attention.

If Trump loses the election, the political pressure faced by Musk will rise sharply, and his personal activity in the cryptocurrency market may be greatly weakened. This is obviously not good news for Dogecoin. After all, Musk's support is an important reason for Dogecoin to frequently appear on the screen in the public eye. Once his shouting effect subsides, the price of Dogecoin may enter a period of emotion-driven volatility, and even create further risks of decline.

Conclusion: Unclear policy + market turmoil, Dogecoin needs to be wary of "double blow"

On the whole, the unclear policy after Harris's election, the risk factor of Musk's support for Trump, and the instability of investor sentiment have made the future of Dogecoin confusing. The future of Dogecoin is likely to be torn between Harris's policy tone and Musk's personal influence. For investors, especially short-term speculators, it is necessary to be vigilant about changes in market sentiment and not to chase ups and downs easily, so as not to fall into unnecessary risks.

In short, this 2024 election will not only determine the political landscape of the United States in the next four years, but may also become a watershed in the fate of Dogecoin and Musk.

Future Outlook: If Harris is really elected president, will it reshape the crypto market landscape?

There are only four days left until the voting day of the US election. No matter who enters the White House, the volatility of the crypto market is probably inevitable. In the short term, strict policy control or the benefits of monetary easing will only be a peak or trough in the market wave; in the long run, the direction of the crypto market will not change, but the road will be more tortuous and unpredictable.

As for where the future of cryptocurrency will go, I am afraid only God knows.

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