The US presidential election is just around the corner, with Donald Trump campaigning to secure a second term as President. If he wins today (November 3), how will his presidency impact the crypto market? Or what will happen if former Vice President Joe Biden makes Trump the first single-term U.S. President since George H. W. Bush lost to Bill Clinton almost 30 years ago?
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One thing\u2019s for sure, economic stimulus to the tune of trillions of dollars is guaranteed whoever ends up in the Oval Office, with both men supportive of pumping eye-watering sums into the economy. And that, theoretically, is very good for bitcoin\u2019s price. But what about the industry as a whole?<\/p>\n\n\n\n
On the face of it, Trump does not seem to be supportive of digital assets, commenting<\/a> in 2019 that \u201cI am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior.\u201d In reality, the substance of what he said wasn\u2019t as significant as the fact he commented about it at all \u2013 a sign of mainstream acknowledgment. Despite the comments, his administration has shown a willingness to encourage cryptocurrency innovation, provided there is consumer protection within appropriate legal frameworks. In July, Biden tweeted<\/a> \u201cI don\u2019t have Bitcoin, and I\u2019ll never ask you to send me any.\u201d This in response to a scam wherein the accounts of prominent people \u2013 Biden, Obama and Bezos among them \u2013 were hijacked in a social engineering attack that saw perpetrators make off with $110,000 worth of BTC. Interestingly, a Biden campaign accepted bitcoin donations back in 2016, noting that it was \u201cin keeping with Vice President Biden\u2019s strong support of technology and innovation throughout his career.\u201d But whether the candidate himself knew about it is anyone\u2019s guess. In any case, Biden\u2019s latest comment was neither pro-Bitcoin or anti-Bitcoin: he simply stated, unsurprisingly, that he didn\u2019t personally own any.<\/p>\n\n\n\n Several bills relating to crypto have been presented to Congress by Republican representatives during Trump\u2019s first term. The Cryptocurrency Act 2020<\/a> was introduced by Rep. Paul Gosar \u201cto provide not only clarity but legitimacy to crypto assets in the United States.\u201d Though failing to pass, it demonstrated the type of approach the party may take. It set out to define categories of digital assets, namely crypto-commodities, crypto-currencies, and crypto-securities, with the CFTC<\/a>, FinCEN<\/a>, and the SEC <\/a>overseeing each, respectively. Likewise, The Token Taxonomy Act<\/a>, introduced this year by Rep. Warren Davidson, stalled during the review process. Warren said that if such a bill gained approval, it would \u201csend a powerful message that the US is the best destination for blockchain technology.\u201d It went further, exempting crypto tokens from US security laws, allowing individuals to transact more freely, and providing clarity to regulators on how to enforce laws. A similar bill could lead to a breakthrough against the regulatory uncertainty that has held back innovation and investment for the space in the US market.<\/p>\n\n\n\n Last month, US legislators tabled a bill<\/a> recommending in-depth study of blockchain in commerce, specifically to improve consumer protection. The bill was introduced by a trio of House Representatives, comprising two Democrats (Reps. Doris Matsui and Darren Soto) and one Republican (Rep. Brett Guthrie). Rep. Soto, who endorsed Biden for President in March, has previously claimed<\/a> that applying federal securities laws to digital assets hurts the market, insisting that most cryptos should not be regulated by the SEC but rather by the Futures Trading Commission (CFTC<\/a>) and Federal Trade Commission (FTC<\/a>). \u201cThe CFTC and FTC are agencies with a lighter touch and we have a growing consensus among the industry that they\u2019d be appropriate for the majority of these types of cryptocurrency transactions and the nature of these assets,\u201d Soto explained. Again, it is worth stressing that neither the bill nor Soto\u2019s previous anti-SEC remarks necessarily means that a Biden Presidency would be net positive for the crypto industry. But if the Democrat-led bill can lead to the study it proposes, and the benefits of blockchain technology are sufficiently demonstrated, it could give the wider crypto industry a boost. Since Trump\u2019s 2016 election win, regulators have gradually got to grips with the nascent space, slowly issuing improved guidance and taking enforcement action against those failing to comply. Crypto-friendly SEC Commissioner Hester Peirce, nominated to her position by Trump, also made a \u201cSafe Harbor<\/a>\u201d proposal. If enacted, crypto token sales would benefit from a three-year safe harbor period to succeed as a decentralized network. SEC Chairman Jay Clayton has been less supportive and part of the reason why a Bitcoin ETF has remained elusive. However, Trump\u2019s nomination<\/a> for him to serve as the next US Attorney for the Southern District of New York could help pave the way for an ETF approval during a second Trump term, with some speculating that Peirce could take his role. The CFTC indicated an early belief that cryptocurrencies are commodities, with its Chairman, Heath Tarbert (again nominated by Trump), calling on regulators to take a less restrictive and tailored approach to crypto regulation. FinCEN took a stricter stance, releasing guidance<\/a> in 2019 that focused on particular crypto projects deemed to be Money Services Businesses (MSBs) under its remit. More positively, President Trump appointed pro-crypto Brian Brooks, former General Counsel at Coinbase, as the Acting Comptroller of the Currency at the OCC<\/a>, the US federal banking regulator.<\/p>\n\n\n\n In the US, the IRS treats cryptocurrencies as capital assets, so any sales are subject to capital gains tax. Some proposals during Trump\u2019s first term highlight attempts to change this treatment, at least for certain classifications of crypto assets. A reclassification to currencies would reduce the current tax burden and incentivize greater use. Suggested exemptions for de minimis day-to-day crypto transactions under a certain threshold, as presented in The Virtual Currency Tax Fairness Act<\/a>, would also prove popular.<\/p>\n\n\n\n Correlation between the crypto market and stock indices has been high lately, meaning continued traditional market performance following a Trump victory would likely benefit the crypto space too. If Trump wins in November, he\u2019ll probably continue to support stimulus spending and easy monetary policy from the Federal Reserve, given his record over the last four years. Combined with a potential new round of tax cuts, it could push the stock market even higher.<\/p>\n\n\n\n It is difficult to predict what stance Biden will take when it comes to cryptocurrency. But it would be wrong to suppose that his age (77) means that he\u2019s beyond the point of \u201cgetting it\u201d. Biden is cybersecurity-conscious<\/a> and critical of the big tech cartels<\/a>, having previously drawn attention to their abuses of power and called for greater competition. That at least means that he recognizes some of the centralization issues assets like bitcoin are attempting to solve. If figures like Yang and Gabbard are able to exert their influence, he could be the first US President to recognize the potential of the industry and to take a soft-touch approach that will allow innovation to flourish. A Trump victory would likely mean more of the same, advancing on the regulatory front. The industry knows where it stands under this administration; work with the regulators, be transparent in your approach, and seek to develop solutions that meet the regulators halfway, and they\u2019ll be supportive. If not, we\u2019ve seen they are not afraid to take enforcement action where deemed necessary. That may go against crypto purist principals but would also open up the possibility of institutional product approvals and greater market access, lowering barriers to entry in the US and driving further crypto adoption. The US presidential election is just around the corner, with Donald Trump campaigning to secure a second term as President. If he wins today (November 3), how will his presidency …<\/p>\n","protected":false},"author":4,"featured_media":1087,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[95,21,40,80,18,12,61,70,94,79,63,96],"class_list":["post-1086","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-learn","tag-biden","tag-bitcoin","tag-bitcoin-news","tag-bitcoin-trading","tag-blockchain","tag-cryptocurrency","tag-cryptocurrency-regulation","tag-cryptocurrency-trading","tag-elections","tag-ethereum","tag-litecoin","tag-trump"],"_links":{"self":[{"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/posts\/1086","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/comments?post=1086"}],"version-history":[{"count":1,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/posts\/1086\/revisions"}],"predecessor-version":[{"id":1088,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/posts\/1086\/revisions\/1088"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/media\/1087"}],"wp:attachment":[{"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/media?parent=1086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/categories?post=1086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.bitflyer.com\/en-us\/wp-json\/wp\/v2\/tags?post=1086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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<\/p>\n\n\n\nBiden on Bitcoin<\/h2>\n\n\n\n
<\/p>\n\n\n\nProposed Legislation<\/h2>\n\n\n\n
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<\/p>\n\n\n\nDemocrat-Led Bill Seeks to Advance Blockchain Analysis<\/h2>\n\n\n\n
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<\/p>\n\n\n\nRegulatory Stance<\/h2>\n\n\n\n
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<\/p>\n\n\n\nCrypto Taxes<\/h2>\n\n\n\n
<\/p>\n\n\n\nStock Market Correlations<\/h2>\n\n\n\n
<\/p>\n\n\n\nThe Verdict<\/h2>\n\n\n\n
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