Smaller cryptocurrencies such as Dogecoin (Doge) and Solana, which have lagged behind Bitcoin for much of this year, are poised to see significant impact depending on the outcome of the U.S. presidential election. While Bitcoin has surged by over 65% in 2024, reaching $70,537—a mere 5% short of its record high—altcoins like Doge have drawn attention for their potential volatility in the wake of the election.
On Tuesday, Bitcoin rose as much as 5.1%, maintaining a strong year-to-date performance. Meanwhile, Dogecoin saw a sharp increase of 18%, partly fueled by remarks from Elon Musk, who suggested that a potential Trump victory could lead to the launch of a “Department of Government Efficiency” (D.O.G.E.). Dogecoin, which trades at about 17 cents, has nearly doubled its value this year.
Despite Bitcoin’s dominance, the election outcome holds particular stakes for smaller altcoins, according to Zaheer Ebtikar, founder of Split Capital. “For Bitcoin, the election doesn’t matter much. For altcoins, they may not recover as much if Kamala Harris wins. They are the biggest winners or losers of the election,” he said.
In previous market cycles, altcoins tended to benefit from rallies following Bitcoin’s performance, but in 2024, they have generally struggled to match Bitcoin’s gains. Exceptions include memecoins like Dogecoin, which has become a symbol of the “memecoin” movement—cryptocurrencies with little to no utility but a strong following.
Ebtikar further noted that if Vice President Harris wins, the crypto industry could face tighter regulation. While Bitcoin and Ethereum are considered more decentralized and may weather such changes, smaller altcoins could be more vulnerable. During the campaign, Republican nominee Donald Trump has taken a pro-crypto stance, contrasting with Harris’s support for a regulatory framework for digital assets. Many in the crypto community believe a Trump victory would be more favorable for the industry.
Despite the uncertainty, some traders remain optimistic that the election results will not have a lasting negative impact on the crypto market. “Medium term, we think markets are headed higher regardless of who wins, as we move past the elections and back to macroeconomic factors and the Fed,” said Shiliang Tang, president of Arbelos Markets, a principal trading firm.
Crypto options markets are signaling heightened volatility in the short term, with potential for significant price swings in Bitcoin and other cryptocurrencies. Analysts expect that leveraged positions could trigger liquidations, contributing to sharp fluctuations in the lead-up to the election’s conclusion.
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