How the US Election Will Impact Cryptocurrency

Donald Trump, in his bid for the White House, has spoken repeatedly about creating a large national Bitcoin reserve. This has been seen as a blatant ploy to garner the crypto vote.

But it has also brought cryptocurrency to the forefront of the election debate, and there are concerns about how much of an impact the election will have on the market. It is likely that new regulations will come into force sometime shortly after the election finishes in November and the new President has a chance to start drafting bills.

Despite campaign promises concerning Bitcoin and the wider crypto market, many crypto insiders are not convinced that the elections will have a major impact on the market. Ethereum blockchain co-founder Charles Hoskinson says that the world will move on whether the US is pro crypto or not. The notion is that even if the US enacts some draconian regulations for crypto, the market will find a way to adapt and will simply move elsewhere, if necessary, like it has in Russia and China.

BitMEX’s former CEO, Arthur Hayes, says that there is no need for regulations. He points out that Bitcoin has done so well already in its lifespan without more regulations, so why would there be need for additional restrictions and safeguards?

On both sides of the political aisle, there is a call for some level of greater regulations and protections for the crypto market, but the market does not necessarily desire that.

What Will Greater Regulation Do?

Democratic lawmaker Ro Khanna says that more regulation will lead to more innovation in the blockchain industry. Is that true? History has shown that less regulation helps to keep innovation moving, whereas stricter regulations stifle innovation.

The US government passed the Financial Innovation and Technology for the 21st Century Act earlier this year, which was designed in part to create a framework for utilization of decentralized currency. It is expected to raise the standards for these kinds of assets, but the industry has a couple of major problems with the bill so far. Firstly, the bill will pigeonhole the market so that it is limited as to what it can and cannot do. Secondly, the bill paves the way for further regulation in the market.

We may see new laws passed for the crypto market very soon, headlined by the new administration that takes over the White House. If the US crypto industry is not happy with those laws, then much of the market may shift outside of the US. Innovation in crypto will happen, but the question is whether the US will be a major part of that or not now that the crypto question is so prominently placed before the presidential candidates.