Market Reaction to Presidential Debate
Bitcoin (BTC-USD) experienced a drop following the US presidential debate between Democratic nominee Kamala Harris and Republican contender Donald Trump. Investors reacted to the debate, which saw Trump—known for his crypto-friendly stance—engage with Harris, leading to a decline in the digital asset’s value.
As of 7:40 a.m. Wednesday in London, Bitcoin had fallen by as much as 2.6% but later recovered slightly to trade at $56,490. In broader financial markets, US equity futures, the dollar index, and Treasury yields decreased, while the Japanese yen strengthened.
Bitcoin and Trump’s Influence
Bitcoin has become part of a broader set of trades associated with Donald Trump due to his strong support for the crypto sector. The cryptocurrency’s performance is being closely watched as a potential indicator of who gained an advantage in the debate.
During the debate, Trump found himself on the defensive as Vice President Harris delivered pointed remarks aimed at challenging him. The debate concluded with pop star Taylor Swift endorsing Harris, and betting markets shifted to favor Harris following the event in Philadelphia.
Debate Impact on Crypto
“The market’s initial reaction was that Kamala Harris won the debate, particularly in the early stages, leading to a minor dip in crypto prices,” explained Caroline Mauron, co-founder of Orbit Markets, which provides liquidity for digital asset trading.
Harris has not yet outlined a detailed policy on cryptocurrency. However, a campaign adviser mentioned last month that Harris supports measures to boost the industry and is interested in implementing safeguards.
Trump’s Crypto Engagement
Trump has shifted his focus to the digital asset sector as he seeks donations and votes in a tight presidential race. He has pledged to make the US the “crypto capital of the planet,” reversing his previous characterization of the sector as a “scam.”
Recently, Trump released his fourth collection of non-fungible tokens (NFTs), including images of him as a motorcycle rider and a boxer. These NFTs have generated significant revenue.
Trump and his sons, Eric and Don Jr., are also backing World Liberty Financial, a project in the decentralized finance sector. Although details are limited, some of Trump’s social media accounts were briefly hacked last week, spreading misinformation about the project.
Crypto Sector and Election Influence
The cryptocurrency industry has gained prominence in the presidential election through substantial donations to political action committees. Crypto firms are advocating for more favorable regulations, countering the Securities & Exchange Commission’s critical stance under Chair Gary Gensler.
Bitcoin reached an all-time high of $73,798 in March, driven by demand for US exchange-traded funds. While the rally has slowed, it has helped soften the impact of a severe bear market in 2022 and major collapses, including the failure of the FTX exchange—one of the largest financial frauds in US history.
