It’s Election Day in the United States! Unsurprisingly, the 2024 U.S. presidential election seems to be impacting the cryptocurrency market. Leading up to the election, Bitcoin’s price saw a 3.7% increase, briefly reaching around $70,300 before stabilizing. This volatility has sparked both interest and caution among investors, with some analysts anticipating further fluctuations after the election results. According to Bitfinex analysts, increased volatility could push Bitcoin’s price higher, while a lack of movement might signal a bearish trend.

The 2024 U.S. presidential election holds particular importance for the future of cryptocurrencies in the U.S., as it could influence the regulation of this growing sector. The election results for both the presidency and Congress (House of Representatives and Senate) will largely shape the direction of laws concerning digital assets. If a single party controls all three levels, new crypto legislation might be delayed until next year, allowing the party to craft laws without needing to compromise with the opposition. In a divided Congress, however, compromises could help advance crypto legislation by the end of 2024. Some lawmakers believe that laws such as the **Financial Innovation and Technology for the 21st Century Act** (FIT21) could be integrated into funding or defense bills, though this remains uncertain. Should this proposal fail to pass this year, lawmakers may revisit the text in 2025 to foster greater bipartisan support.

Alternative proposals are also being considered, including a bill from the Senate Agriculture Committee, though it is still in its drafting stage. With influential voices in both parties advocating for a clearer regulatory framework, the future of crypto in the U.S. remains uncertain but seems set to play an increasingly central role in legislative discussions, regardless of the election outcome.

Where do the presidential candidates stand on cryptocurrencies? Trump has shifted from a skeptic to a strong supporter of the crypto space, while Harris distances herself from the Biden administration’s anti-crypto policies, offering different perspectives for the industry should one of them win the presidency.

Donald Trump, once critical of Bitcoin and crypto in general, has now adopted a favorable stance toward this industry. He has launched several NFT collections, supported a decentralized finance (DeFi) project, and denounced central bank digital currencies (CBDCs), fearing their impact on financial freedom. His protectionist approach also leads him to support Bitcoin mining in the U.S. and to call for the replacement of Gary Gensler, the SEC chairman, seen as a barrier for cryptocurrencies. His pro-crypto position has earned him notable support from industry leaders, who see him as a potential ally for the sector’s development in the U.S.

Kamala Harris, in contrast, has approached crypto more discreetly, though her platform includes commitments to emerging technologies like blockchain. In October, she announced a regulatory framework for digital assets, specifically to protect investors, particularly in African American communities, though it ultimately applies to all Americans. Harris has also expressed support for technological innovation in the country, including crypto and artificial intelligence, which could foster a more welcoming environment for the digital asset sector.

In sum, while Trump is focused on a protectionist, pro-industry vision to bolster crypto in the U.S., Harris aims to oversee innovation while establishing a regulatory framework to protect investors. These contrasting approaches indicate that the election outcome will have a direct impact on crypto regulation and development in the country, potentially influencing the U.S. cryptocurrency market for years to come.

Uncertainty has led traditional investors to reduce their exposure to Bitcoin, resulting in record withdrawals from U.S. Bitcoin ETFs. On Monday, these funds recorded capital outflows totaling $541 million, with significant losses in funds like the Fidelity Wise Origin Bitcoin Fund and the ARK 21Shares Bitcoin ETF. The only exception was BlackRock’s iShares Bitcoin Trust, which saw a modest inflow of $38.4 million. However, the upward trend observed suggests this trend may have reversed on Tuesday.

The 2024 U.S. presidential election is generating massive interest on prediction platforms like Polymarket and Kalshi, where millions of dollars are being bet on the outcome of the election between Donald Trump and Kamala Harris. Polymarket, which has surpassed $3.2 billion in volume, relies on media consensus to determine the winner. If major networks such as the Associated Press, Fox News, and NBC News all call the race for the same candidate, the market will resolve. However, in cases of persistent divergence, Polymarket will declare the winner based on the inauguration on January 20. Kalshi uses a different approach, declaring the party whose candidate is ultimately inaugurated as the winner, regardless of who takes office. On Robinhood, which uses ForecastEx contracts, the winner is determined after the official certification of results by Congress on January 6. This variety of rules reflects uncertainty around the election process and potential disputes, especially with Trump already hinting at possible fraud if Democrats win. Prediction platforms offer investors a way to bet not only on the winner but also on how the election will be resolved in the event of disputes. Traders can secure gains by selling their shares as trends become clear, or choose to wait for final market resolution. However, if prolonged disputes occur, some traders may have to wait until the inauguration for their payouts, depending on the platform.

According to a report by Bernstein, the 2024 U.S. presidential election outcome could have an immediate impact on Bitcoin’s price. A Trump victory could push Bitcoin to $90,000, while a Harris victory might cause a drop to around $50,000. However, these fluctuations would likely be temporary, as Bernstein analysts predict that Bitcoin will reach $200,000 by the end of 2025, regardless of the election result, underscoring the asset’s resilience despite political uncertainties. Analysts attribute this optimistic forecast to the recent introduction of Bitcoin ETFs in the U.S., approved in January, which attracted over $20 billion in institutional capital. This massive institutional support provides a solid foundation for Bitcoin’s future growth, regardless of political dynamics. Trump, who has presented himself this year as a Bitcoin supporter, has stated he wants Bitcoin mining to be dominated by American miners and has even launched a decentralized finance (DeFi) project called World Liberty Financial. These initiatives reflect his support for the crypto sector, while Bitcoin continues to approach its historic highs, signaling increasing investor confidence in the asset.

The Bitcoin network reached a new historic milestone, with mining difficulty exceeding 100 trillion for the first time, marking a 6.2% increase. This rise follows a seven-day average hash rate record of 755.5 EH/s, indicating the computing power dedicated to the network by miners. Mining difficulty, adjusted every two weeks, measures the relative difficulty of finding a new block. As more miners join, this difficulty rises to maintain a block creation rate of around 10 minutes. Following the last halving in April, which reduced miners’ rewards from 6.25 BTC to 3.125 BTC per block, miner revenues fell significantly, now ranging from $25 to $35 million per day. This decrease in profitability pushed less efficient miners out of the market, while remaining players, primarily public miners in the U.S., strengthened their operations by adding capacity and upgrading equipment. In 2024, public miners’ strategies have diversified, with companies like Core Scientific, IREN, and Terawulf exploring artificial intelligence, allowing them to outperform firms solely focused on Bitcoin mining, such as CleanSpark and Riot. This diversification reflects a trend of adapting to changing market conditions, as the mining sector evolves to maximize profitability despite increasing mining difficulty.

Recent market analysis suggests that Bitcoin’s price could reach $120,000 by 2025 if the Market Value to Realized Value (MVRV) ratio continues to increase. This ratio, which compares Bitcoin’s market value to its realized value, is currently at 2, indicating that the market’s surface value is twice the on-chain estimated value. CoinLupin, an analyst from CryptoQuant, notes that the MVRV ratio has recently exceeded both the annual average and the four-year average, indicating that Bitcoin’s bullish momentum remains intact. If this trend continues, Bitcoin could potentially reach between $95,000 and $120,000. Independent analyst Mags has also observed a buy signal on the hash ribbon indicator, suggesting a potential rise for Bitcoin. In a previous analysis, Mags projected a price target of around $101,679 for Bitcoin, which currently has solid support around $68,000. This support level is reinforced by the 20-day exponential moving average (EMA), located around $68,221, a key area where approximately 1.1 million BTC were bought by 2.5 million addresses. In sum, despite macroeconomic uncertainties, Bitcoin maintains a positive momentum, supported by technical indicators and strong support around $68,000. This data suggests significant growth potential, strengthening analysts’ optimistic forecasts for a possible rise to six figures in the coming years.

The presented information is as of November 5th, 2024, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.