As the 2024 U.S. presidential election enters its final stretch, interest is intensifying around how the results may impact Bitcoin prices and the broader crypto market. At the end of October, Bitcoin surpassed $70,000, with a prevailing belief that a Trump victory could positively influence the crypto market. As the world closely watches the U.S. election, this report examines the overall impact of the election on crypto, the policy differences between the candidates, and the implications for the South Korean market.
Before examining the correlation between Trump’s approval ratings and Bitcoin prices, it’s essential to understand the Biden administration’s stance on crypto—a position Trump may use to his advantage in the election.
During the Biden administration, regulations led by the SEC were largely unfavorable to the crypto industry. Operation Choke Point 2.0, for example, imposed administrative restrictions that severely limited new capital entering the crypto market. Specifically, banks were barred from offering crypto-related services, crypto companies were denied banking licenses, and banks dealing with crypto firms faced increased scrutiny. Additionally, the SEC’s SAB 121 policy posed further obstacles for financial institutions in crypto, requiring institutions holding crypto on behalf of clients to list these assets as liabilities on their balance sheets. For institutions bound by strict debt-to-equity ratios, this essentially discouraged engagement in crypto-related activities since they would need to allocate additional capital to maintain compliance. A bipartisan bill aimed to nullify this administrative policy, but the Biden administration’s rejection of the bill further escalated tensions with the industry.
These policies eventually led to a capital drought within the crypto industry, which can be seen in stablecoin market shares. Starting in early 2023, the market shares of USDC (issued by Circle) and USDT (issued by Tether) began to diverge. Although USDC experienced a temporary de-pegging to $0.87 following the collapse of Silicon Valley Bank in March 2023, the sustained downturn was due to the difficulties in capital inflows caused by SAB 121 and Operation Choke Point 2.0. While USDC’s growth was stifled under U.S. regulatory constraints, USDT—operating globally and outside of U.S. regulatory reach—likely saw new capital inflows spurred by Bitcoin’s rise and the broader growth in the crypto industry.
Vice President Harris, aware of the backlash against the Biden administration’s restrictive stance, has suggested that she would adopt a more crypto-friendly approach to improve relations with the industry. However, her stance has been widely criticized as lacking specificity. While she pledges a shift toward a pro-crypto stance, her policies remain vague on how she intends to enact such changes or foster industry growth. If the current administration remains in power, the existing personnel structure would likely stay in place, making any dramatic policy shift challenging; reversing course on crypto policy would essentially mean disowning previous positions.
The crypto industry’s dissatisfaction with the Democratic administration, given regulatory actions and Vice President Harris's ambiguous stance, is glaringly evident. Prominent industry figures have voiced their discontent—Charles Hoskinson, founder of Cardano, criticized the Biden administration for what he called a “well-orchestrated crypto-killing effort,” while Coinbase CEO Brian Armstrong went so far as to say that the “SEC should issue an apology to the American people.”
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Trump’s campaign seized this moment of widespread industry dissatisfaction with the Biden administration and the SEC. Once dismissive of Bitcoin as a “scam,” Trump has now reversed his stance for this election cycle. He likely recognizes the strategic advantage of appealing to the rapidly expanded crypto sector, which has grown multifold since his last presidential campaign. Trump has publicly pledged to make the U.S. the “crypto capital of the world” and even proposed establishing a strategic Bitcoin reserve, garnering substantial support from industry participants. His remarks at Bitcoin2024, including a memorable “Never Sell Your Bitcoin,” resonated strongly with the crypto community, drawing widespread applause.
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In addition to shifting regulatory policies enacted by previous Democratic administrations, Trump has vowed to dismantle regulations like Operation Choke Point 2.0 and SAB 121, and to remove SEC Chair Gary Gensler from office. Unlike the current SEC, which has delayed definitive regulation with ambiguous stances, Trump has promised to establish clear regulatory guidelines. This clarity would mitigate business risks stemming from regulatory uncertainty and foster a favorable business environment. The repeal of Choke Point policies could allow financial capital to flow more freely into the crypto sector, creating a virtuous cycle. Given Trump’s starkly different stance from the Biden administration, Bitcoin and other crypto assets have been rising in tandem with his approval ratings. Research firm Bernstein even forecasted that if Trump were elected, Bitcoin could climb as high as $90,000. If Trump wins and fulfills these promises, crypto businesses that previously relocated to the Middle East, Singapore, or Portugal might return to the U.S., potentially transforming the country into a true “crypto capital.” The simultaneous rise in Trump’s approval ratings and Bitcoin prices is no coincidence.
The ongoing U.S. presidential election, a key driver of Bitcoin’s recent price movements, is also expected to impact South Korea’s crypto market, both directly and indirectly. U.S. regulatory direction often sets a global standard, so a Trump victory—with its potential for regulatory easing and a pro-crypto approach—could encourage the South Korean government to reconsider its own stringent policies. If the U.S. regulatory environment becomes more crypto-friendly, discussions currently underway in South Korea—such as Bitcoin ETF issuance, corporate account creation, and investment permissions—may gain momentum.
Beyond regulation, Trump’s pro-crypto stance and his promise to dismantle Operation Choke Point could spur new capital inflows into the industry, fostering an environment conducive to fresh initiatives and projects. U.S.-based crypto entrepreneurs who left may even return, potentially leading to new crypto ventures. With South Korea’s active altcoin market, these developments could invigorate the domestic scene, especially as new projects emerge.
Currently, strict regulations in South Korea make it challenging to operate crypto-related businesses. Restrictions on ICOs, Bitcoin ETFs, corporate account creation, and investments drive Korean crypto entrepreneurs to jurisdictions like Singapore, Abu Dhabi, and Dubai, where crypto regulations are established, and tax benefits are significant. This has led to a regrettable outflow of national wealth. Meanwhile, South Korean crypto trading volumes remain among the highest globally, reflecting a market where local investors primarily trade overseas coins, rather than supporting a robust domestic ecosystem. Given that both U.S. presidential candidates have expressed, to varying degrees, a pro-crypto stance, there is hope that the election’s outcome could usher in positive changes for the South Korean crypto market as well.
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