Bitcoin (BTC-USD) experienced a decline of up to 2.6% following the US presidential debate between Democratic nominee Kamala Harris and Republican contender Donald Trump, who has expressed strong support for the cryptocurrency sector. As of 7:40 a.m. Wednesday in London, Bitcoin had partially recovered to trade at $56,490.
In broader market movements, US equity futures, a dollar index, and Treasury yields fell, while the yen strengthened. Bitcoin, one of the so-called “Trump trades,” attracted attention due to Trump’s advocacy for the digital asset industry. The cryptocurrency’s performance was seen as a potential indicator of the debate’s outcome.
During the debate, Trump frequently found himself on the defensive as Harris delivered pointed remarks. The debate’s aftermath saw pop icon Taylor Swift endorse Harris, and betting markets shifted in Harris’s favor following the event in Philadelphia.
Caroline Mauron, co-founder of Orbit Markets, noted, “The market assessed Kamala Harris as having won the debate, especially in the early stages, leading to a modest dip in crypto prices.”
Harris has yet to outline specific policies on cryptocurrency but has indicated support for measures to foster industry growth while maintaining regulatory safeguards. In contrast, Trump has made a dramatic shift towards embracing the crypto sector, promising to make the US the “crypto capital of the planet,” despite previously criticizing it as a “scam.”
Trump’s recent endeavors include the release of a fourth collection of non-fungible tokens (NFTs), featuring various themed images, which have garnered millions in revenue. Additionally, Trump and his sons Eric and Don Jr. are promoting World Liberty Financial, a venture in the decentralized finance sector, though details are limited and some Trump family social media accounts were briefly compromised by hackers last week.
The digital asset sector has gained political influence through substantial donations to political action committees, seeking more favorable regulations amidst scrutiny from the Securities and Exchange Commission under Chair Gary Gensler.
Bitcoin reached an all-time high of $73,798 in March, driven by demand for US exchange-traded funds. Although the rally has since moderated, it has softened the impact of a severe bear market in 2022 and the collapse of major platforms like FTX, one of the largest financial frauds in US history.
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