US Political Climate and Its Impact on the Cryptocurrency Market: Insights from Grayscale and TD Cowen

As the US presidential election approaches, voters are increasingly considering digital assets as investments, while the crypto industry anticipates significant legislative changes.

A Pressing Issue

According to a Grayscale study, the relevance of Bitcoin is increasing due to “macro dynamics and its own maturity.” This is evidenced by a survey of 1,768 US citizens planning to vote in the November 2024 presidential election.

Nearly half of the respondents (47%) are ready to allocate a portion of their investment portfolio to cryptocurrency. At the end of last year, this segment of respondents was 40%.

“The two potential presidential candidates represent completely different views on the country’s situation, and nearly half of registered voters say they would replace them if they had a choice. Amid this uncertainty, crypto assets are becoming increasingly relevant to ordinary citizens,” the report states.

28% named inflation as the top priority in the upcoming elections, which “further underscores the potential value of assets with transparent and strictly limited supply like Bitcoin.”

Analysts noted that Donald Trump has begun to actively use cryptocurrency themes in his presidential campaign. Additionally, recent cryptocurrency bills — FIT21 and SAB 121 — have received bipartisan support in the government.

The survey data confirms that cryptocurrency has become a “bipartisan topic” with roughly equal ownership among Republicans (18%) and Democrats (19%).

“America stands at a crossroads in many respects. Both candidates pursue different macroeconomic policies regarding national debt, inflation, the independence of the Fed, and the role of the US in the world. Each of these positions has a direct impact on the dollar and Bitcoin. As voters become more interested in cryptocurrency, the next administration’s approach to digital assets will be crucial,” Grayscale emphasized.

The Legislative Path

Political spending on the upcoming US elections may have prompted the SEC to approve spot exchange-traded funds based on Ethereum, and the government to pass a cryptocurrency market bill. This view is held by TD Cowen, reports The Block citing the investment bank’s report.

According to researchers, the Fairshake political committee, advocating for pro-cryptocurrency candidates, and its divisions have raised over $100 million for the 2024 elections.

“This financial weight helps explain everything […]. We see this as a positive moment for the stablecoin bill this year and the market structure in 2025. Few things in politics speak louder than campaign donations,” TD Cowen noted.

Experienced election campaign participants do not want to face competitors who receive money from pro-cryptocurrency organizations, as they “want to secure these funds for their own re-election,” the bank’s analysts believe.

Overall, the crypto community actively supports Bitcoin-friendly candidates. Tron founder Justin Sun urged voting for such a president.

We should support a ?? presidential candidate who endorses cryptocurrencies. We need to demonstrate to the candidate that the cryptocurrency community, companies, and protocols are significant stakeholders whose voices should be heard and whose interests should be protected.

— H.E. Justin Sun 孙宇晨 (@justinsuntron) May 26, 2024

In his view, it is necessary to remind that participants in the cryptocurrency market are “important stakeholders whose voices should be heard and whose interests should be protected.”

Previously, billionaire Mark Cuban stated that if Joe Biden loses the upcoming presidential election, the crypto community will have a chance to “thank” the SEC and its head Gary Gensler.

As reported in a Paradigm survey, about 48% of voters owning digital assets plan to vote for Trump in the upcoming US presidential election. Another 38% support Biden, while 13% remain undecided.