U.S. cryptocurrency stocks fell sharply in early trading on Wednesday following a contentious presidential debate between Democratic candidate Kamala Harris and Republican contender Donald Trump. Trump, known for his pro-crypto stance, had hoped to appeal to the crypto community, but Harris’s performance and subsequent support from pop star Taylor Swift shifted market dynamics.
The debate left Trump on the defensive, and Harris’s improved performance, coupled with Swift’s endorsement of Harris to her massive Instagram following, led to increased bets on a Harris victory. As a result, the probability of a Harris win rose to 56% from 53%, while Trump’s chances declined to 48% from 52%, according to betting platform PredictIt.
In the aftermath, Bitcoin, which had been seen as a barometer for the debate’s outcome, saw its value drop by 2%, with Ether falling by 2.6%. This downturn reflects a broader shift in market sentiment away from Trump’s crypto-friendly policies. Trump had previously promised favorable regulation for the crypto industry and suggested that his administration would hold Bitcoin as a store of value. In contrast, Harris has not yet detailed her crypto policy, creating uncertainty among investors.
The reaction from the market indicates a cautious outlook towards Bitcoin and other cryptocurrencies, as the debate did not address crypto directly but influenced investor sentiment. Analysts note that while the crypto market is often volatile and perceived as high-risk, the endorsement from influential figures like Taylor Swift and the debate dynamics have introduced new uncertainties for crypto assets.
Market participants and analysts are now watching the developments closely, with predictions that uncertainty could persist until the November election. The decline in crypto-related stocks, including prominent players like Riot Platforms, Marathon Digital, MicroStrategy, and Coinbase Global, reflects the broader impact of political developments on the crypto sector.
