How will the U.S. election impact crypto?

One managing director says the outcome of the U.S. presidential election will have little impact on cryptocurrencies, despite the view among other market participants that Bitcoin has become a bet on a Donald Trump victory.

Bloomberg News reported Thursday that Bitcoin has been viewed as a Trump trade due to the Republican nominee’s ties with the crypto industry, which spent significantly to further its agenda on the campaign trail. Alex Tapscott, managing director at Ninepoint Digital Asset Group, said in an interview with BNN Bloomberg Friday that the consensus view in prediction markets is that as the price of Bitcoin rises, so do odds of a Trump election win.

“We’ve actually done some analysis and what it shows basically is that there’s a pretty low correlation between the price of Bitcoin and Trump’s odds of winning the election on any given day. Bitcoin is more likely to be correlated to several other assets,” he said.

“Unsurprisingly, things like his Trump Media Corporation are more likely to be strongly correlated. So, to me, the election is kind of a non event for crypto, which I think is a bit of a contrarian take.”

According to Bloomberg News, Trump envisions the U.S. as a global crypto capital, while Harris has pledged to support regulation in the sector. However, both U.S. presidential candidates would mark a change from a crackdown on the industry that took place under President Joe Biden.

Tapscott said that in his view, the impact of whoever is the president on the crypto market is “overstated” and notes that Kamala Harris is “not Joe Biden.”

“One of the things that’s happened during this entire election season is that the window has really shifted. And now you see both parties actively courting this vote. It’s not just because the industry is spending a lot of money,” he said.

Instead, crypto-related issues have become important to a large number of voters, Tapscott said. He highlighted that around 25 per cent of Millennials and Gen Z own crypto assets and that group has a “point of view on this technology.”