United States President Joe Biden’s exit from the presidential elections helped Bitcoin’s price stage a brief recovery despite creating additional market uncertainty.
On July 21, Biden announced that he was dropping out of the United States 2024 presidential race.
Following the news, Bitcoin (BTC) initially declined but staged a nearly 1.5% recovery during the same day, reaching a daily high of $68,364, marking an over one-month high, according to Bitstamp data.
The initial drop in Bitcoin’s price was a momentary, knee-jerk reaction to the uncertainty caused by Biden’s decision, according to Bitfinex analysts, who told Cointelegraph:
“Bitcoin initially declined 3% following Biden’s announcement but subsequently recovered. This was a knee-jerk reaction to temporary uncertainty in the market. By Monday morning, it had increased by 0.9% over the previous 24 hours, moving past $68,000, which is close to its all-time high of $73,666, reached in March.”
The outcome of the US elections could have significant implications on the crypto industry in the world’s largest economy and regulatory consequences in other parts of the world.
The Bitfinex analysts also noted that Biden’s exit from the presidential race could be perceived as “neutral to slightly negative in the short term” due to the uncertainty regarding potential policy changes.
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Kamala Harris is a wildcard for the crypto industry
On July 23, US Vice President Kamala Harris secured pledges from 2,668 delegates, passing the threshold of support needed from delegates to secure the Democratic Party presidential nomination.
However, Harris’ crypto stance could be a wildcard for the crypto industry and invite more potential regulatory scrutiny, according to Bitfinex analysts:
“Harris’s stance on cryptocurrency isn’t well-documented, making it difficult to predict with certainty. However, Harris’s political positions suggest a focus on consumer protection and financial regulation, which might imply continued scrutiny of the crypto market.”
In contrast, billionaire investor Mark Cuban said that Harris could be more open to technological innovation and cryptocurrencies than President Biden.
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Investors will likely adopt a “wait-and-see” approach: Analyst
Crypto investors will likely adopt a more passive approach until Harris offers more clarity on her crypto-related perspectives, Bitfinex’s analysts added:
“Investors might adopt a wait-and-see approach until Harris’s policies become clearer. The current administration has been relatively cautious regarding crypto, with a focus on regulation. A continuation of this stance under Harris might not be immediately positive for the market.”
However, prediction markets continue to favor former US President Donald Trump as the most likely candidate to win the elections.
Over 62% of Polymarket users have bet on Trump to win the November elections, while only 35% have placed bets on Harris.
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