Bitcoin (BTC-USD) experienced a decline as investors reacted to the recent U.S. presidential debate between Democratic nominee Kamala Harris and Republican contender Donald Trump, who has shown support for the cryptocurrency sector. The digital asset dropped as much as 2.6% before partially recovering, trading at $56,490 as of 7:40 a.m. Wednesday in London. Concurrently, U.S. equity futures, a dollar index, and Treasury yields fell, while the Japanese yen strengthened.
Bitcoin, often linked to so-called “Trump trades” due to the former president’s endorsement of the crypto industry, was under scrutiny as investors looked for signals on which candidate performed better in the debate. Trump, who has previously criticized the sector as a “scam,” has recently shifted his stance, positioning himself as a proponent of digital assets and aiming to make the U.S. the “crypto capital of the planet.”
During the debate, Trump faced challenges from Vice President Harris, who used pointed remarks that seemed intended to undermine the Republican nominee. The debate’s outcome appeared to favor Harris, with betting markets reflecting a shift in her favor following the event. Pop star Taylor Swift’s endorsement of Harris shortly after the debate further fueled the perception of her victory.
Caroline Mauron, co-founder of Orbit Markets, attributed Bitcoin’s decline to the market’s early assessment of Harris as the debate’s winner, leading to a slight drop in crypto prices.
Harris has yet to outline a specific policy on cryptocurrency, though a campaign adviser recently suggested that she would support initiatives to foster industry growth while considering regulatory safeguards. In contrast, Trump has been actively courting the crypto sector, leveraging it for fundraising and voter support. His recent efforts include releasing a fourth collection of non-fungible tokens (NFTs), featuring images of himself in various personas, which have garnered substantial revenue.
Additionally, Trump and his sons have promoted World Liberty Financial, a venture in the decentralized finance (DeFi) space, though details remain sparse and the project has faced security issues, including a recent hack of Trump family social media accounts.
The cryptocurrency industry has gained prominence in the presidential race, with substantial donations to political action committees and a push for more favorable regulations. This stands in contrast to the Securities & Exchange Commission’s critical approach under Chair Gary Gensler. Bitcoin reached an all-time high of $73,798 in March, driven by demand for U.S. exchange-traded funds, but recent volatility and past events like the collapse of the FTX exchange have tempered its momentum.
