Regulatory Setting for Bitcoin

The regulatory setting for Bitcoin is improving, as stated by Bitwise Chief Investment Officer Matt Hougan on Wednesday, regardless of whether Donald Trump or Kamala Harris wins. This is potentially positive not just for Bitcoin but especially for other cryptocurrencies.

Bitcoin's price has been approaching new all-time highs recently, partly driven by momentum leading into the 2024 U.S. election on Nov. 5.

Hougan mentioned in an interview with Yahoo Finance, "Of course, in the short term, crypto favors a Trump victory over a Harris victory, but really, Bitcoin doesn't need Washington to succeed. Institutions are moving into the space, adoption is rising, ETF flows are happening. I think we go higher either way."

Polls and Market Trends

Most national polls remain relatively split, though former President Trump's lead on Polymarket has been rising to nearly 70%, marking its highest level yet, while Vice President Harris is experiencing her lowest odds since she joined the ticket in August. The popularity of the Ethereum-based betting market has surged this election season, with over $2.6 billion in cumulative bets on the outcome.

The increasing Polymarket odds of a Republican sweep for the presidency, Senate, and House may facilitate the passage of several crypto-related bills. Analysts from Presto noted that a Trump win would have a more significant impact on Ethereum and other altcoins, according to Bitwise's CIO.

Regulatory Clarity

Hougan remarked, "I think the regulatory clarity you're talking about actually matters more for the so-called altcoins, for Ethereum on down. Those are more exposed to regulatory risks, so I would expect an altcoin rally, even more so than a Bitcoin rally in the event of a Trump win. But regardless, I think both are moving higher."

Bitcoin currently has more regulatory clarity than Ethereum and other digital assets because the U.S. Securities and Exchange Commission and CFTC have classified it as a commodity and embraced spot Bitcoin ETFs. However, this is not the case for Solana, Aptos, and other altcoins.

Hougan added, "I suspect if we get a new SEC, that will become clear, which will drive institutional adoption, and we'll see that rising tide lift all of those boats." He believes that 2025 will be even better than 2024.

Earlier this month, Bitwise forecasted a Bitcoin 'melt-up' to the $80,000 level by the end of this year.

In a memo to clients dated October 9, Hougan concluded, "To thrive, Bitcoin doesn’t need politicians. It just needs them to get out of the way. And barring a Democratic sweep of both houses of Congress and the White House, I suspect they will take a more neutral approach to the industry."