- Bernstein analysts suggest that Bitcoin’s decline is linked to Kamala Harris gaining support in polls against Donald Trump, with investors viewing a Harris administration as potentially unfavourable for crypto.
- The report says Harris’ rising odds on Polymarket have kept Bitcoin within a limited range, preventing it from reaching previous highs.
- Overall, crypto remains a sensitive political issue, with both parties recognising its importance as the US presidential elections approach.
Bitcoin is tanking, thanks to Kamala Harris.
Well, that’s what analysts from Bernstein suggest: as Harris gains support in polls against former President Donald Trump, it appears the crypto market sentiment is shifting negatively, mostly because some investors and members of the crypto community see a Harris administration as potentially unfavourable for crypto.
This might not be surprising, given that the Biden administration has faced criticism for being overly stringent regarding its approach to crypto. However, the criticism can be largely attributed to Gary Gensler, the chairman of the Securities and Exchange Commission (SEC).
What’s more, Bernstein analysts noted that Harris’s rising odds on Polymarket have made the crypto markets nervous, keeping Bitcoin within a limited range and preventing it from reclaiming its previous June highs of around US$70K (AU$106K).
The Polymarket Phenomenon
Oh, prediction markets… You don’t need research firms publishing exit polls or doing extensive research and analysis on the political landscape. Just take one look at Polymarket and you’ll see who’s the next president of the United States.
Related: Trump vs Harris: Crypto-Bets Show Tie in Presidential Race
That’s because Polymarket has developed tremendous product market fit (PMF). Its simple and straightforward approach to crypto betting has turned it into a reliable indicator of investor sentiment, particularly in the political arena. The more bettors wager on Harris, the more it signals a growing belief in her chances of winning the election.
It’s simple: if bettors believe a particular candidate is gaining momentum, it could create bullish sentiment, driving up crypto prices to some extent. Conversely, if confidence in a certain candidate drops, it triggers panic.
“Our interpretation of current market sentiment is that a Trump win is bullish, while a Harris win is bearish (at least in terms of immediate market reaction),” reads the report.
Crypto As a Sensitive Political Instrument
Gensler’s tenure has seen aggressive enforcement of regulations against cryptocurrency firms (and the industry as a whole) which he infamously described as being plagued by “hucksters, fraudsters, and scam artists”.
Moving on, Gensler’s approach towards crypto regulation has led to significant backlash from the industry, with key figures like Brian Armstrong, CEO of Coinbase, arguing that harsh (and unclear) regulatory oversight stifles innovation and pushes businesses to more crypto-friendly countries.
Related: ‘Crypto for Harris’ Campaign Kicks Off in Democratic Bid to Gain Crypto Vote
All in all, it seems crypto will remain a sensitive topic to political developments, especially now that the US presidential elections are set for November. No wonder why both parties are recognising the importance of the crypto sector. Whether they’re appealing to voters or actually care about the industry remains to be seen in the months to come.
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