As the U.S. presidential election draws near, one group of voters could have a surprising impact: cryptocurrency enthusiasts. With a growing number of Americans embracing digital assets, experts speculate that crypto could play a pivotal role in shaping the election outcome. A 2023 survey by Coinbase found that around 20% of American adults now own some form of cryptocurrency. What's more, many of these individuals believe the nation's financial system is overdue for an overhaul.
Given these stakes, the so-called "crypto vote" could sway the election, especially if candidates embrace the digital revolution. So, let us examine each presidential candidate's views on cryptocurrency to draw some conclusions.
Donald Trump’s views on cryptocurrency
Donald Trump’s views on cryptocurrency have evolved significantly as the digital asset industry gains political clout. Initially skeptical, Trump now appears to be embracing the crypto world, with recent moves like the release of his second collection of Trump NFTs, hosted on the Polygon blockchain.
In May, Trump made history by becoming the first presidential nominee to accept campaign donations in crypto. The following month, he publicly advocated for all Bitcoin mining to take place within the United States. These actions mark a clear shift from his earlier stance, signaling that Trump recognizes the growing importance of crypto among voters.
Trump’s pro-crypto stance distinguishes him from political opponents who prefer stricter regulations on digital assets. In a private dinner for buyers of his NFT collection, Trump criticized President Biden and SEC Chair Gary Gensler, urging pro-crypto voters to back him if they wanted a favorable environment for digital currencies.
Though Trump has yet to reveal specific plans for taxing digital assets, his past support for lower taxes is clear. During his presidency, he passed the Tax Cuts and Jobs Act in 2017, the largest overhaul of the tax code in decades. Trump has promised that if re-elected, he would make these tax cuts permanent, which could have implications for crypto investors, particularly concerning capital gains taxes. The IRS currently treats cryptocurrencies as property, subjecting them to capital gains taxes, but Trump's administration might explore changes to the tax treatment of digital assets.
At a rally in New Jersey, Trump promised further tax cuts, including reducing the maximum capital gains rate from 20% to 15%. This move would directly impact crypto holders, as digital asset transactions would face lower tax rates. Additionally, while the IRS ruled in 2021 that only "real property" can qualify for tax-deferred exchanges, some legal experts believe that crypto could still be treated favorably under certain conditions.
In late July, Trump spoke at the 2024 Bitcoin Conference in Nashville, where he promised to introduce crypto-friendly regulations and create a strategic Bitcoin reserve for the U.S. This proposal echoes draft legislation introduced by Senator Cynthia Lummis, which briefly suggests that a national Bitcoin stockpile could help reduce the U.S. national debt, though specific details are still lacking.
Kamala Harris’ views on cryptocurrency
The Democratic Party’s 2024 presidential nominee, Kamala Harris, currently serving as Vice President under the Biden administration, has yet to define her position on cryptocurrencies clearly. However, her role in the administration provides insight into the broader Democratic approach to crypto, which has been marked by both regulatory caution and attempts to balance innovation with oversight.
Under President Biden, the government has taken a more proactive stance on the crypto industry, aiming to foster economic growth while ensuring consumer protection. In March 2022, Biden signed an executive order establishing a framework to assess the risks and benefits of cryptocurrencies. This order addressed six primary areas, such as consumer protection, responsible innovation, and maintaining global competitiveness. It also sought to promote better coordination among government agencies.
By September 2022, the administration had built on this initial executive order by releasing a more detailed framework for responsible digital asset development. This plan expanded on the key themes of innovation and risk management, offering more comprehensive guidelines on approaching digital currencies in a way that balances opportunity with regulation.
Looking ahead, it remains unclear how Harris would handle the crypto policies outlined in Biden’s 2025 budget proposal. Some of these policies include measures to tighten rules around digital asset transactions, such as preventing rapid buy-sell cycles and mandating more traditional reporting methods. The proposal also includes an excise tax on the electricity used in cryptocurrency mining, expected to generate $10 billion in 2025 and over $42 billion by 2035. Whether Harris will continue down this path or take a different direction is yet to be seen, as she has not officially addressed these issues.
One challenge for the Democrats has been maintaining a unified approach to crypto regulation, and Harris has not yet made her stance on digital assets a focal point of her campaign. Notably, crypto policy was absent from the Democratic Party’s 2024 platform, leaving questions about how a Harris administration would navigate the crypto landscape.
Despite this uncertainty, some industry insiders remain hopeful that Harris might take a more moderate approach to crypto regulation. Her background includes close ties to the tech sector, dating back to her time as California’s Attorney General when she played a crucial role in shaping privacy agreements with major tech companies. These connections could indicate a willingness to engage with the digital asset industry.
Concluding remarks
As the 2024 U.S. election approaches, the relationship between the crypto industry and politics is becoming increasingly symbiotic. Not only is the election expected to influence the crypto market, but the industry itself is already shaping the political landscape at both federal and state levels.
Some analysts think the crypto community might rally behind Donald Trump, who has positioned himself as a pro-crypto candidate. Recent comments from Donald Trump suggest that, if elected, his administration would take a more permissive stance toward cryptocurrency. On the other hand, while a Kamala Harris administration might offer a more progressive and open-minded approach compared to the Biden administration's cautious policies, it would likely still emphasize thoughtful, measured decision-making.
Many experts in the crypto space support a balanced regulatory framework. They argue that regulation has encouraged more serious investors to enter the market, providing stability and legitimacy. Over the past several months, the increased regulatory oversight has been a critical factor driving crypto's strong performance.
As the election looms, the future of crypto regulation hangs in the balance. The outcome will have far-reaching implications, potentially reshaping the direction of the crypto industry and determining how innovation and oversight coexist in the years ahead.