Post-election crypto market outlook: key narratives to watch

With both U.S. presidential candidates (especially Republican candidate Donald Trump) going out of their way to talk about future crypto policy and regulation, the intersection of politics and crypto is growing as political events increasingly influence the outlook and development of the crypto market. As such, the potential for major regulatory shifts or new narratives is high as each presidential candidate has their own unique take on where crypto is headed in the coming years. As regulators play a prominent role in determining digital asset law, knowledge of the top crypto market trends of 2024 and the next four years could be useful as the crypto industry continues to grow and evolve alongside policy implementations.

This article explores the major narratives crypto traders are following if either former President Donald Trump or Vice President Kamala Harris is elected. These outcomes may impact the crypto market post-election, and understanding the election aftermath could prove helpful for traders looking to manage the impending volatility post-election. We'll also take a look at how prediction markets are shaping perspectives and how reliable they might (or might not) prove.

A brief overview of the stances each presidential candidate has

In our Trump vs Harris article, we covered what each candidate has said on record with regards to crypto and its future in America. To summarize, here are the key points mentioned by both Donald Trump and Kamala Harris in their past addresses.

Crypto narratives to consider if Trump wins

The crypto market has experienced varied sentiments from Trump in the past. Despite being previously bearish on crypto for undermining the global strength of the U.S. dollar, things seem to have changed drastically. Should Trump secure another term, we may see the following crypto narratives take hold of the market.

Bitcoin adoption and the BTC Ecosystem

During his previous tenure as President, Trump expressed skepticism towards Bitcoin (BTC), citing concerns about its potential to undermine the global dominance of the U.S. dollar. This view aligned with a traditional monetary stance, where a strong dollar was considered by many as being key to maintaining the U.S. economy’s position in global markets. However, Trump’s recent public statements and interest in Bitcoin mining and BTC reserve policies suggest a potential shift in his stance. As such, a second term could potentially bring a more supportive approach to Bitcoin, especially if the administration begins viewing BTC as a means to capture innovation, increase American job opportunities, and secure competitive positioning against other countries in digital asset infrastructure.

Such a shift could accelerate institutional adoption of Bitcoin in the U.S., encouraging domestic crypto mining operations and further expanding BTC's role in the mainstream financial ecosystem. The influence of such a policy could lead to relaxed regulations on Bitcoin and mining, fostering an atmosphere where BTC’s role as “digital gold” could gain substantial traction and U.S. states might be incentivized to develop mining-friendly policies. This could eventually lead to a positive inflow of interest towards Bitcoin and its ecosystem as projects related to restaking and inscriptions gain renewed attention amid the keen interest in Bitcoin adoption.

The rise of DOGE and other memecoins

Many traders believe that Trump’s potential presidency could fuel interest in memecoins like Dogecoin (DOGE), which has often surged in response to support from influential public figures such as Elon Musk. Given Musk's known support of DOGE and the Trump administration’s favorability toward free markets, the two could generate momentum for the memecoin space.

If Musk were to leverage a Trump victory to amplify his support for DOGE, we could possibly see renewed popularity for DOGE and other memecoins among retail traders, fueled by the concept of finance as fun, community-driven, and accessible. This could also set the stage for broader social media integration of cryptocurrencies, particularly memecoins, as platforms backed by figures like Musk or others explore DOGE tipping and similar features. On top of this, we may see an increase in interest regarding PolitiFi memecoins as Trump-themed PolitiFi projects gain increased reach thanks to Trump's electoral victory.

DeFi and Trump’s World Liberty Financial (WLF)

Another area of potential impact lies in DeFi given Donald Trump's association with the financial independence platform WLF. According to its Gold Paper, WLF is a new DeFi project that seeks to reduce reliance on centralized financial institutions by creating a stablecoin that's pegged to the U.S. dollar and serves as a digital alternative to traditional fiat currency. Based on the goals of WLF, some believe a re-elected Trump administration might align with policies supporting financial autonomy and private capital formation given these are themes embodied by DeFi. The emergence of WLF could serve as a broader catalyst for DeFi narratives, promoting financial systems outside traditional banking and reinforcing open-access protocols that attract traders looking for alternatives to centralized finance.

If introduced, such policies might foster an environment in which DeFi protocols could possibly see increased interest, especially from U.S.-based users and institutions. With potential tax or policy incentives to foster financial freedom, there could be a rise in DeFi adoption as DeFi platforms like Uniswap and OKX DEX gain prominence. This could be particularly so among users seeking services outside traditional banks or those needing global access to financial tools. Moreover, a supportive environment for WLF or similar initiatives could prompt additional venture capital and innovation in DeFi, strengthening the space's role as a viable alternative to traditional financial systems.

Crypto narratives to consider if Harris wins

On the other hand, based on the Vice President's reported policy goals, which include promoting inclusive financial systems and positioning the U.S. as a technological leader in fields like AI, a Harris administration could potentially emphasize different aspects of the crypto industry. In particular, there could be a focus on cross-border payments and the integration of artificial intelligence (AI) with blockchain technology.

Let’s dive deeper into how these narratives could possibly play out under her leadership.

Ripple, Stellar, and cross-border payments

Vice President Harris has previously noted the potential of technology in making the global financial system more inclusive and efficient. Cross-border payments are one area where crypto’s decentralized nature can make a significant impact, especially in emerging markets. Given that solutions like Ripple (XRP) and Stellar (XLM) are actively working on solutions for rapid, cost-effective international transactions, some believe their technology could gain traction if Harris promotes policies that encourage the use of blockchain for remittances and cross-border payments. With supporters such as Ripple's Chris Larsen contributing almost $12 million to her campaign, we may see this take shape in the future if there is stronger regulatory backing for similar cross-border payment networks. If Harris supports a framework that encourages financial inclusion, Ripple, Stellar, and Celo (CELO) might be positioned as foundational assets for achieving accessible, affordable financial services globally. This could lead to a favorable environment where U.S. fintech and crypto companies could partner with other nations and organizations to improve global remittance channels.

Additionally, Harris’ potential backing of these projects could strengthen the narrative around crypto for social impact. With Ripple, Stellar, and other cross-border networks touted as tools for financial empowerment, these assets might appeal to retail traders and institutional investors alike. Traders seeking alignment with socially conscious policies could find these assets particularly appealing, driving both adoption and value in projects with cross-border solutions.

AI-powered crypto

One of Harris’ key policy focuses has been the development of AI as a competitive advantage for the U.S.. This ambition to lead in AI technology could impact the crypto sector, especially in areas where blockchain intersects with AI. As a result, AI-powered crypto assets or platforms that integrate AI and blockchain could gain visibility if Harris’ administration follows through with promoting U.S. leadership in AI research and applications. For instance, crypto projects like the Artificial Superintelligence Alliance are already exploring applications where AI-driven algorithms enhance decision-making, data analysis, and even automated trading within decentralized platforms, while Bittensor innovates in the realm of decentralized AI.

Some would argue that the focus on AI leadership could lead to government-backed initiatives that prioritize research funding, tax breaks, or grants for projects at the intersection of AI and blockchain. This could support existing AI-focused crypto projects and catalyze the development of new protocols that integrate machine learning, decentralized data management, and blockchain for applications in industries like healthcare, finance, and supply chain. The growth of such projects could bring increased capital flows and mainstream interest into this emerging space.

How close are the U.S. elections? A test of prediction market reliability

Prediction markets have recently gained traction as a way to gauge the sentiment surrounding significant global events. In essence, these sites operate by allowing people to bet on the outcomes of events such as elections, and have been touted as a potential measure of sentiment since they tap into the collective wisdom of the crowd. Specifically, prediction markets like Polymarket, Kalshi, and BET on Drift have gained popularity for offering contracts that cover political event outcomes.

The upcoming U.S. elections will be a test for these prediction markets. By analyzing the market's movement and the accuracy of its predictions, we can gauge the reliability of this emerging tool. If the market's predictions align closely with actual election results, it could solidify its position as a valuable resource for political forecasting and risk assessment.

Beyond election results: how crypto's future growth may persist

While the 2024 election could influence crypto sentiment in the U.S., it’s important to recognize that crypto remains a global asset class, independent of U.S.-specific political influences. The decentralized and borderless nature of crypto ensures it operates outside traditional banking systems and relies on global participation rather than the policies of any one government. Whether Trump or Harris takes office, crypto markets are expected to continue developing internationally, with innovations and trends driven by global adoption rather than any specific national policy.

Crypto’s global digital asset appeal

Cryptocurrencies have demonstrated resilience and relevance across various economic and political landscapes, emphasizing their utility as borderless and decentralized assets. The value of digital assets like Bitcoin often stems from their intrinsic utility and global user base, making them less sensitive to the political climate of any one nation. For instance, even in times of heightened regulation or restrictive policies in individual countries, the crypto ecosystem has consistently managed to adapt and grow, highlighting its global asset appeal. This global participation supports a network that can weather domestic policy changes, which helps to buffer volatility stemming from isolated regional events. Furthermore, the global consensus around the decentralized nature of these assets is what lends Bitcoin and other digital assets their resilience — regardless of shifting U.S. policies.

Insights from industry leaders on the long-term impact of U.S. elections

Industry leaders have commented on how the long-term trajectory of crypto is more insulated from U.S. election results than many other financial sectors. BlackRock CEO Larry Fink has underscored this by highlighting crypto’s ability to act as a hedge against traditional political events. This insulation is due to crypto’s decentralized infrastructure, which is less influenced by localized economic and policy shifts. Fink has also noted that crypto’s global and decentralized nature allows it to operate independently from any one regulatory environment, reinforcing that its growth is tied to a broader trend of digital and decentralized finance rather than to the outcomes of U.S. elections alone.

Given crypto’s resilience and unique market characteristics, the 2024 election may act as a momentary influence rather than a defining factor in crypto’s long-term path. For those interested in understanding how Bitcoin and other cryptocurrencies have historically performed during market highs and political shifts, our guide to trading Bitcoin at all-time highs can offer additional insight into Bitcoin’s historical performance and continued relevance in today’s market.

Final words and next steps

The 2024 U.S. elections are expected to be one of the most-watched events among political and financial commentators. Whether Trump or Harris takes office, traders should be prepared for potential shifts in sentiment, narratives, and regulatory stances. For those in the crypto market, focusing on broader crypto market trends in 2024 and maintaining a diversified crypto portfolio that may benefit from varying outcomes can offer a balanced approach. Crypto remains fundamentally global, with Bitcoin, emerging DeFi, and AI projects suggesting that digital assets are here to stay, regardless of political developments.

Keen to learn more about managing your risk as a crypto trader? Learn how to hedge your holdings with crypto options. Alternatively, if you're interested in the future potential of BTC, check out our guide on if it's too late to get into Bitcoin.