Will the U.S. Election Change Crypto? Here’s Why It Likely Won’t Slow Down Institutional Adoption
As we head into Election Day, global markets are watching the U.S. closely, with particular attention on how the results might shape the future of cryptocurrency and digital assets. While crypto enthusiasts may be wondering how a Biden or Trump victory will influence the blockchain space, the consensus among many industry experts is clear: traditional finance giants (TradFi) are unlikely to shift their commitment to crypto, regardless of the election outcome.
This may come as a surprise to some, given the uncertainty surrounding cryptocurrency regulation in the U.S. But the broader picture shows that crypto adoption, particularly at the institutional level, is moving forward at a strong pace. In this article, I’ll break down the key points of this debate, explore the impact of the election on crypto’s future, and show why major players in finance are not about to retreat from their crypto investments.
Will the U.S. Election Affect Crypto?
One of the biggest questions surrounding crypto is whether a change in leadership will have a material impact on its adoption and regulation. Here’s what we know so far:
- Traditional finance institutions (TradFi), including giants like Citigroup, UBS, and Fidelity, have made significant strides in integrating blockchain and digital assets into their business models.
- While political rhetoric may cause short-term market fluctuations, long-term, these institutions have already embraced the growth of the digital asset ecosystem, especially blockchain technology.
1. Adoption Will Continue Regardless of Election Outcome
No matter which candidate wins the 2024 election, industry experts agree that institutional adoption of crypto will continue.
Phillip Shoemaker, Executive Director of Identity.com, a leader in decentralized identity solutions, believes the push for digital assets will persist globally:
“Adoption of digital assets at the institutional level will very much continue globally no matter who wins the election.”
While the election may shift the timing of crypto adoption or influence the pace of regulatory frameworks, the technology itself—blockchain and cryptocurrencies—has already secured its place as an integral part of the future of finance.
2. Election Outcome May Influence Timing and Regulation
While overall adoption is expected to continue, who wins the election could still affect how quickly digital asset innovation accelerates. If Donald Trump wins a second term, crypto advocates believe the sector could see a faster rollout of exchange-traded funds (ETFs) and stablecoin integration, as Trump has historically supported the crypto industry. Conversely, Kamala Harris winning could result in a more cautious approach, especially regarding regulatory frameworks.
Markus Levin, Co-founder of XYO Network, sees institutional adoption accelerating if pro-crypto candidates are in office:
“If pro-crypto candidates win out in these elections, we would see not only broader institutional adoption in the United States but also international organizations like the IMF and World Bank warming up to crypto in a way that we just haven’t seen yet.”
On the flip side, a victory for Harris may lead to slower adoption, mainly because of a more restrictive stance on regulation under her administration.
3. Institutional Players Aren’t Waiting for the Election Outcome
Despite the election’s potential influence on the pace of adoption, major financial institutions are already moving ahead with their plans in the digital asset space. The recent collaboration between SWIFT, Chainlink, and UBS is one example. The trio is testing digital asset transactions that can settle with fiat payment systems, potentially involving over 11,500 financial institutions across 200 countries.
This development alone signals that global financial institutions are planning for a future where digital assets are just another tool in their financial infrastructure, regardless of the political climate.
4. The Regulatory Hurdle: What Happens Under a Harris Administration?
One concern for the crypto community is the potential regulatory crackdown under a Kamala Harris administration. While Biden’s administration has already implemented certain measures that have been seen as restrictive, a second term for Biden might bring even stricter crypto regulations. This could slow down the adoption of altcoins and more complex digital assets beyond Bitcoin (BTC) and Ethereum (ETH).
Phillip Shoemaker raises a critical point here:
“If Harris were to win, I still think institutional adoption would happen. But it would happen more gradually.”
Additionally, Gary Gensler, the Securities and Exchange Commission (SEC) chair, could see his power grow under a Harris presidency, potentially leading to stricter enforcement of crypto regulations that might limit the growth of altcoins and other decentralized assets.
5. Institutional Investors Are Seeking Clarity
As Shoemaker and other experts have noted, institutional investors crave regulatory clarity. A clear regulatory framework is crucial for large-scale investment in cryptocurrency and blockchain technologies. Under a Harris administration, this could be harder to achieve, which might make investors hesitant or cautious in their exposure to digital assets.
“The current market data suggests that institutional investors are particularly sensitive to regulatory clarity, and a Harris administration would need to change their historical stance to provide the predictability they seek.”
6. Why Crypto’s Long-Term Future Remains Strong
While the short-term impact of the U.S. election remains uncertain, the long-term potential of blockchain technology and cryptocurrency is undeniable. This election will not change the fundamental value that crypto brings to the table, including its potential to:
- Disrupt traditional finance
- Provide financial inclusion for the underbanked and unbanked populations
- Enhance transparency and security in transactions
As Michael Casey, CoinDesk’s former Chief Content Officer, aptly put it:
“These shorter-term fixations on the market miss the bigger picture of what’s at stake in terms of the place that blockchain technology should occupy in the evolution of the technology that’s impacting our lives.”
Conclusion: No Matter Who Wins, Crypto’s Future Looks Bright
The U.S. election may cause short-term uncertainty in the crypto market, but institutional adoption and blockchain innovation are moving forward at full steam. Whether it’s the Trump administration pushing for faster innovation or a Harris administration taking a more cautious approach, the long-term trajectory for crypto is set to continue. Major financial institutions are already heavily invested in blockchain technology and digital assets, and they aren’t about to back out because of a single election cycle.
As the crypto industry matures, its role in the global financial ecosystem will continue to grow, regardless of who occupies the White House.
