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- The US election is around the corner - here's what you need to know.
The US election is around the corner - here's what you need to know.
And how institutions are adopting blockchain.
Matt Curda
October 17, 2024
Dear Investors,
I have been a little distant, and you missed some market updates due to that.
But please, be patient! Changes are coming, and soon, we’ll be back to a regular schedule with a little cherry on top.
Meanwhile, let’s take a look into what’s happening.
In This Letter
The US Elections — What you need to know
Source: Leonardo
The US elections are on November 5th, less than three weeks away.
Right now, the polls are slightly in favor of Kamala Harris, but some betting platforms. Including Polymarket, already favor Mr. Trump.
The next 4-5 weeks will be heavily influenced by the outcome of political debates and odds turning in favor of one or the other candidate.
What will the investors watch out for? Stability.
Let’s explore the main differences that could affect markets - both crypto and traditional.
Kamala Harris | Donald Trump | |
|---|---|---|
Taxes | Raise the top corporate tax rate to 28% from 21% Raise the income tax rate to pre-2018 levels (Trump cuts) for the wealthiest Americans. | Reduce the top corporate tax rate to 15%-20% from 21%.
Permanently extend the tax rates established in the (TCJA), which would require legislative action. |
China | Less restrictive. Impose tariffs on industry rivals (including tech) but cooperate on global challenges like climate. | Aggressive. A flat 60% tariff on all goods from China (and 10-20% on other countries, including the EU), Phase out imports and reduce the trade deficit. |
FED | Keep the FED independent and, most likely, Jerome Powell as its chairman. | Challenge the Fed’s political independence, favor monetary easing, lower interest rates, and replace Jerome Powell. |
AI, Tech, Blockchain | Regulation of AI and Blockchain companies - ensure “responsible use of AI.” Yet to share her stance on cryptocurrencies and blockchain. | Considers AI, cybersecurity, and Blockchain strategic priorities (“virtual arms race” with China), and has already started unveiling national strategies on each. He and his family are active crypto users - NFTs, Meme, and his son have a DeFi project (World Liberty Financial) that Trump is endorsing.1, 2 |
Impact on the markets
Stock Market
A Harris presidency aims to increase regulation and taxes, which could negatively affect technology sectors and large corporations. Her push for green energy could, however, benefit renewable energy sectors and infrastructure.
Trump's policies favor US corporations, particularly through lower taxes, deregulation, and reduced imports (trade deficit). This should positively affect a broad range of US companies and negatively affect EU and Asian companies exporting to the US.
Crypto Market
Harris's regulatory stance on technology and AI signals more oversight of crypto, potentially leading to more restrictions for blockchain projects. She is yet to share her stance on cryptocurrencies and her plans.
Trump's previous administration took a hands-off approach - not blocking, not supporting. However, this time, Trump vocally supports AI, blockchain, and cryptocurrencies. His son is running a DeFi project Trump endorses, and he blames Gary Gensler for letting the US sit on a bench while the world is pivoting into a new era of technology.
The Biden administration was heavily against crypto. Yet, BTC kept on rallying and hit new ATH before halving.
Now, imagine what would happen if we got a crypto-friendly president. If the US stops selling BTC and adds it to its reserves? If we get a stablecoin bill? If the banks are allowed to custody crypto? If companies could market their products to the US citizens?
Has the market priced this in? Probably not.
Putting it together
Markets do not like uncertainty, and until we have a clear winner (any would suffice), we are about to see some quick turns, especially in the crypto and tech sectors.
Either candidate would bring needed stability, and investors expect to see a year-end rally.
In the short term, Trump might provide a quicker and steeper pump, helping the crypto and technology sectors rally. In the long term, he might damage the economy through aggressive international politics and overheating the market.
But he will definitely help onboard Americans to crypto, making DeFi great again - imagine stablecoin yields instead of your average savings account.
Who do you think will win the elections? |
Institutions Adopting Crypto
Source: Dall-e
Going beyond boring politics, many things are happening under the radar as institutions continue to adopt blockchain as a technology to solve their problems.
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