What U.S. Presidential Candidates See in Cryptocurrencies: Why Bitcoin Became So Popular Among Politicians in 2024

After U.S. President Joe Biden's decision not to participate in the November presidential elections, new trends related to politics have emerged in the crypto market. The key figure who has recently attracted the attention of crypto users is U.S. Vice President Kamala Harris.

On the largest crypto betting platform for real-world event outcomes, Polymarket, traders have adjusted their expectations for the U.S. election results. The probability of Harris becoming the U.S. president has increased nearly fivefold over the past week, reaching 29%. In contrast, the probability for former U.S. President Donald Trump has dropped to 62% from a peak of 72%. The betting market volume for the U.S. elections has exceeded $365 million.

The topic of politics on Polymarket has become so popular that in July, the betting volumes on the platform grew to a third of the total volume for 2024, according to Bloomberg data.

Activity is also increasing in other segments of the crypto market. The price of the meme coin Kamala Horris (KAMA), associated with Kamala Harris, has risen about tenfold over the past week, reaching a market capitalization of $35 million. During the same period, the Trump-related token MAGA (Make America Great Again; ticker TRUMP) has lost about 20% of its value, although its market capitalization still exceeds that of the Kamala Horris token by approximately eight times, according to Coingecko data.

It is expected that some actions or statements by politicians will be reflected in so-called PolitiFi tokens, which are deliberately created to monetize attention to political events. This is a separate category of meme coins, most of which are created as jokes or experiments and do not have fundamental value.

For example, after the June debates between Trump and Biden, some of the largest "political" meme coins lost up to several dozen percent in value. A similar buzz is now expected around the upcoming debates between Harris and Trump, scheduled for September 10.

• Political Bitcoin

Some market participants believe that Harris will be more active in the tech sector than Biden. For instance, billionaire and crypto investor Mark Cuban, according to Decrypt, stated that the feedback he has received indicates she will be more open to business in the fields of artificial intelligence and cryptocurrencies. "I get a lot of questions about cryptocurrency from her team. So I take that as a good sign," he added.

David Bailey, CEO of Bitcoin Magazine, also noted Harris's team's interest in the large annual Bitcoin 2024 conference in Nashville, USA, scheduled for late July: "We are in negotiations with Kamala Harris's campaign team about her speaking at the conference. It would be very wise for her to reconsider the Democrats' stance on the fastest-growing voter bloc in the country."

Harris declined to speak, but it is known that Trump will participate in the conference. There are expectations that the former U.S. president will not only address the topic of "friendly cryptocurrency regulation." According to Coinmarketcap's head of analytics, Alice Liu, quoted by Coindesk, Trump may announce plans to use the main cryptocurrency as the country's national reserves.

• Fight for the Electorate

Interest in cryptocurrencies from U.S. presidential candidates could be driven by the vast number of voters who, in one way or another, follow the election agenda.

The opinion that cryptocurrencies will influence the U.S. elections was supported by Ark Investment Management CEO and founder Cathie Wood, as well as former Coinbase CEO Balaji Srinivasan, according to Benzinga.

The same likelihood was suggested in an analytical note by Grayscale, the issuer of the Bitcoin ETF: "Given the growing popularity of Bitcoin and the significance of young voters, it will be interesting to see how presidential candidates' positions on cryptocurrency evolve."

This viewpoint is shared by analysts from Coinbase, the largest cryptocurrency exchange in the U.S. According to their data, by the end of 2023, one in five Americans owned cryptocurrency: "The reality is that now one in five adults owns cryptocurrency — this is a group of 52 million Americans. This is not only a large absolute number but also a group that will shape future cultural, political, and economic trends."

However, there is a downside to this trend. As the founder of the second-largest cryptocurrency, Vitalik Buterin, noted, there is a growing tendency in the community to prefer political parties and candidates solely based on their stance on cryptocurrencies.

He pointed out the risks of such voter behavior: "I am against this trend and argue that making decisions this way carries a high risk of going against the values that initially brought you into the crypto space."