Wild Speculation Swirls Around Bitcoin’s Post-Election Trajectory

As the U.S. presidential election approaches, Bitcoin has surged, reaching a staggering $73,000 recently and nearing its all-time high. With prediction markets showing Trump’s odds of winning rising, some investors are speculating that a Trump victory could further buoy the cryptocurrency, while a win for Kamala Harris might bring short-term volatility. However, analysts argue the election's impact on Bitcoin may be overstated, pointing to longer-term drivers and uncertain policy commitments from both candidates as more significant influences on the digital asset’s future.

The “Trump Trade” Narrative: Misplaced or Momentous?

A faction of crypto enthusiasts believes that Trump’s victory would lead to tax cuts, protectionist policies, and other economic measures that could create favorable conditions for Bitcoin. This so-called “Trump Trade” has been hyped in some media, yet data points to a more nuanced reality. Alex Tapscott, a notable voice in the crypto space, highlights that while the Trump-related narrative is enticing, it may be overblown. Correlation analysis between Bitcoin prices and Trump’s prediction market odds showed only a weak relationship, suggesting the recent Bitcoin rally may not be as tied to the political landscape as some assume.

There are also concerns about the reliability of prediction markets, where platforms like Polymarket have recently faced accusations of wash trading—activity allegedly designed to inflate Trump’s odds artificially. The phenomenon has raised eyebrows on Wall Street and beyond, but given the nascent nature of prediction markets, some investors are discounting their influence. According to Tapscott, “the weak correlations and overblown narratives should give some comfort that we can stop fretting over the election as some huge catalyst for markets.”

Bitcoin’s Long-Term Prospects: More Than Just an Election Bet?

Analysts from Bernstein project that Bitcoin’s future is bright, election outcomes notwithstanding. In their latest report, the firm suggested that a Trump win might push Bitcoin to new all-time highs between $80,000 and $90,000, while a Harris victory could temporarily depress the price to around $50,000. However, Bernstein analysts argue that Bitcoin’s resilience is likely to drive it past $200,000 by 2025 regardless of who sits in the Oval Office. They cite the popularity of Bitcoin ETFs and an influx of institutional capital as pivotal to this long-term growth.

Bernstein’s forecast underscores that, while short-term fluctuations could follow election results, the digital asset’s trajectory is more influenced by structural factors. Bitcoin has become a prominent store of value, and as the financial sector’s digital transformation accelerates, demand for assets outside traditional finance is likely to rise.

Policy Divergence: Trump’s Crypto Pivot vs. Harris’ Possible Caution

Trump’s recent pivot toward crypto has stirred curiosity and concern. In 2024, he launched World Liberty Financial, a decentralized finance (DeFi) project on Ethereum, signaling a newfound interest in crypto. His rhetoric has shifted, advocating for U.S.-based Bitcoin mining, which he claims would support American dominance in the crypto sector. But critics caution that Trump’s relationship with the sector may be more about capitalizing on the hype than a genuine commitment to crypto’s development.

While Harris has been quieter on crypto policy, speculation suggests her administration might adopt a cautious stance, particularly if she inherits current regulatory tensions between the SEC and crypto firms. Tapscott points out that regardless of who wins, there is ample opportunity for an administration to support crypto through pro-industry legislation, SEC reform, or even opening energy markets to foster Bitcoin mining. But, he warns, “presidents simply don’t have that much influence,” with many factors influencing Bitcoin that go beyond the executive branch’s reach.

Looking Past the Election: The Market’s Resilience

Despite varying policy stances, Bitcoin’s core strengths—its decentralization, global liquidity, and inflationary hedge appeal—continue to resonate with investors. The growing popularity of Bitcoin ETFs has already led to over $20 billion in inflows, adding a layer of stability and attracting significant capital from institutional investors. Meanwhile, ongoing deficit spending in the U.S. is expected to keep up demand for alternatives to fiat currencies, further supporting Bitcoin.

Ultimately, while election chatter dominates headlines and fuels speculation, crypto market watchers caution against reading too much into the short-term impact of any single political event. With institutional capital flowing in and decentralized finance expanding, Bitcoin's post-election future seems less tied to a “Trump Trade” and more likely to reflect the gradual maturation of digital assets into the broader financial ecosystem.

Whether Trump or Harris takes the White House, Bitcoin’s resilience will likely persist, powered by forces far larger than any single administration. For investors betting on the future of crypto, this election may serve as a blip on the radar, while the sector's long-term growth trajectory remains steady and strong.