The debate between the two leading US presidential candidates, Kamala Harris and Donald Trump, is expected to take place tonight at 9 p.m. ET and millions of viewers will be scrutinizing and dissecting the words of these political leaders to get a better sense of what their agendas and policy views are.
This high-stakes face-off is expected to be polarizing as Trump and Harris hold widely contrasting opinions on vividly debated topics including abortion, immigration, economics, taxes, and yes… crypto.
Bets in the popular prediction market Polymarket indicate that there is a 17% chance that Trump will say “crypto” or “Bitcoin” while the odds for Harris are slightly lower at 13%. These probabilities trail behind other pressing issues including colorful campaign rhetoric.
Meanwhile, on Manifold, another prediction market, “Bitcoin” ranks near the bottom of the most likely topics of debate with odds of just 12%.
Despite these low probabilities of direct crypto mentions during the debate, the digital asset sector will still be watching closely to see who “wins” the debate as Trump is often considered the most crypto-friendly candidate of the two, meaning that a perceived victory could dramatically increase his odds of winning the presidential race.
What do Trump and Harris Think of Crypto?
Once a critic of Bitcoin and digital assets, Trump is now considered a supporter of the sector, likely because he realized that crypto lobbyists were planning to dump millions and millions of dollars into the election. Public Citizen found that the crypto industry accounts for nearly half (48%) of all corporate money donated to political action committees (PACs) this year.
Throughout this year, he has been actively courting influential players in the crypto community and positioning himself as the crypto-friendly alternative compared to the current administration’s hostile tone against the nascent blockchain industry.
His efforts to persuade crypto enthusiasts have not gone unnoticed and have gone as far as to tout himself as the “Crypto President.” Notable strides have been made to reinforce this view including accepting crypto donations for his campaigns, the sale of non-fungible tokens (NFTs), and public speeches during widely attended crypto conferences.
Trump also made the headlines after he supported a legislative proposal to create a strategic Bitcoin reserve for the United States.
In contrast, Kamala Harris’ position on cryptocurrency is not entirely clear. Serving in the Biden administration, which is generally perceived as antagonistic to the crypto industry, Harris finds herself in a complex position.
The current administration’s recent veto of a motion to repeal SAB 121, a controversial crypto accounting rule, has raised concerns in the crypto community. It is worth noting that there was bipartisan support for this repeal.
Harris’s campaign has promised to “reset” relations with the industry, but we still don’t have any concrete evidence of a significant policy pivot. Although she is seen as a tech-friendly Democrat, her specific view of digital assets remains to be seen. Her team has engaged with crypto industry leaders, but these meetings haven’t yet provided clarity about her plans. This fits with her campaign strategy of vague promises to both sides of issues like antitrust, business regulation in general, and Israel’s brutal war on Gaza.
This stark contrast in approaches has led some to view Bitcoin as the “Trump trade” while others remain cautiously optimistic about the potential for a more balanced approach from an upcoming Harris administration. The debate offers a crucial opportunity for both candidates to clarify their positions and potentially sway the crypto vote.
Truth be told, there are millions on the line for the person who manages to convince crypto lobbyists and power players. Various crypto PACs have been assembled and have attracted over $100 million from donors to advance the industry’s agendas. If this sounds insane and completely undemocratic, you’re absolutely right. But it’s not all that unusual in US politics. The main difference is that the scale of spending from the crypto industry alone is staggering, beating out even the oil and gas industry.
One Firm Expects Some Post-Debate Volatility for Cryptocurrencies
Ahead of the debate, analysts appear to be expecting a certain degree of volatility in the price of digital assets. QCP Capital is among the market analysis firms warning that the polarizing nature of the debate may result in temporary spikes or downturns for certain cryptocurrencies.
They scouted the derivatives market and identified that traders have been amassing Bitcoin options that are set to expire tomorrow at a price of $57,500. The trading volumes indicate that a 3.3% price change could be expected to occur after the debate.
Meanwhile, the debate is not the only event indicating that there is a heightened expectation of volatility for crypto assets as the 30-day correlation of the market with the MSCI World Equity Index has reached 0.6 – a two-year high that suggests macroeconomic uncertainty as the performance of digital assets has detached from that of the equity market.
Despite these expected short-term shocks, there are indications of continued confidence in crypto’s long-term growth. Large call option purchases for March 2025 with strikes at $85,000, $100,000, and $120,000 for Bitcoin were also identified by QCP. This activity reflects optimism about the market’s growth prospects.
The meme coin market has also reacted a bit to the upcoming debate. Politically-themed tokens, particularly those tied to Donald Trump, have seen gains just hours before the event.
For instance, the MAGA (TRUMP) token, the largest Trump-themed coin in terms of market cap, has seen its price advance by 1.6% in the past 24 hours.
Meanwhile, a relatively unknown token named PEPE (TRUMP) that depicts a cartoonist parody of Trump as Pepe The Frog saw its price surge by 83% in the past 24 hours and its market cap currently stands at $100 million.
However, a warning from Gopluslabs indicates that the smart contract supporting the latter token reportedly contains malicious code, meaning that investors should proceed with caution and mostly avoid this kind of circumstantial offering.
Comments on Tech Policy Could Move the Needle for Crypto Assets
As the debate approaches, market participants will be keenly focused on several key factors that could influence crypto prices. Harris’ comments will be scrutinized for insights into her economic policies, and traders will compare her stance to Trump’s more clear-cut position on issues like corporate taxes and tariffs.
Any mentions of cryptocurrency regulation or blockchain technology could significantly impact market sentiment as traders will be looking for clues about how the regulatory environment could look like if one candidate or the other wins.
Beyond specific crypto mentions, discussions on broader technology and innovation policies could indirectly affect the digital asset market. Harris’s reputation as a tech-friendly politician, combined with the uncertainty surrounding her specific plans for the digital asset sector, adds an element of unpredictability to the market’s reaction.
Jake Ostrovskis, an OTC trader at the crypto market maker Wintermute suggests that the debate may be more significant for crypto prices than economic factors such as US jobs reports. A strong performance by either candidate could result in significant repricing activity due to their divergent stances on the matter.
Prediction market odds show a tight race between Harris and Trump with 52% of the market anticipating a victory for Trump in the November election. Interestingly, while Trump leads the charts in election predictions, 74% of bettors believe that Harris will win the debate, highlighting a disconnect between debate performance expectations and overall election predictions.
Also read: Trump Promises Huge Corporate Tax Cut: Here’s What It Means for Businesses
It is worth noting that the outcome of the previous presidential debate prompted Joe Biden to resign as it was revealed that he was woefully unfit to compete with Trump’s rhetoric in a live showdown, let alone do everything else it takes to run for president.
Some market observers, like Quinn Thompson, founder of crypto hedge fund Lekker Capital, argue that Bitcoin may not react significantly to a single election development. He sees the race as a toss-up.
Thompson notes that Bitcoin was more obviously a “Trump trade” when Trump had a clearer lead in the polls, suggesting that the market may have already priced in much of the election uncertainty.
Regardless of the immediate market reactions, the Trump-Harris debate stands as a crucial moment for the cryptocurrency industry. It offers an opportunity for both candidates to articulate their visions for the future of digital assets in America and could set the tone for any upcoming regulatory approaches.