SAN FRANCISCO — For months, cryptocurrency investors have been eagerly awaiting the presidential election, convinced that a victory for former President Donald Trump would be good for bitcoin.

On the campaign trail, Trump has promoted himself as a crypto believer, raising hopes that a Republican victory Tuesday could send the prices of digital currencies soaring. Bitcoin surged to $73,000 late last month, close to its record, after an influential crypto-powered betting market gave Trump a 67% chance of winning the election.

The election results are poised to cause more volatility. Over the past week, bitcoin’s price fell 7% to roughly $68,000 as the betting odds shifted to give Trump a narrower lead over Vice President Kamala Harris. Many crypto investors are hoping the price could rebound this week.

“We expect bitcoin to break all-time highs on a Trump win,” the investment management and research firm Bernstein said in a report Monday, predicting that the digital currency could rise as high as $80,000 or $90,000. But if Harris wins, the report said, bitcoin’s price could fall as low as $50,000.

The election Tuesday is easily the most important political event in crypto’s history. For the first time, the industry’s leading companies have mobilized to invest enormous sums, funding a network of super political action committees that have spent tens of millions of dollars in key congressional races. The results could determine whether crypto companies flourish in the United States, or end up decamping to other countries in the face of a regulatory crackdown in Washington.

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The market for bitcoin and other digital assets is known for its rapid swings. Early this year, bitcoin’s price climbed after the federal government allowed traditional financial firms to offer a new investment vehicle directly tied to the bitcoin market. The new products, a type of exchange traded funds, were a hit on Wall Street and attracted billions of dollars. In March, bitcoin reached a record price of $73,750.07, according to CoinMarketCap, a website that tracks crypto prices.

2024 Election Is Pivotal for Crypto

Since then, the 2024 U.S. election has emerged as a pivotal moment for crypto. The Biden administration has aggressively pursued crypto companies for violating federal securities rules, bringing lawsuits against the Coinbase exchange and other large U.S. firms. In response, much of the industry has thrown its support behind Trump.

Trump was once a crypto skeptic who dismissed bitcoin as “a scam.” But as crypto companies began donating large sums to influence the election, he warmed to the industry, promising to end the government’s crackdown.

This summer, Trump spoke at a bitcoin conference in Nashville, Tennessee, and vowed to turn the United States into “the crypto capital of the planet.” He also started his own crypto business, World Liberty Financial, and aggressively promoted it on social media.

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In the run-up to the election, a set of super PACs financed by the crypto industry has spent more than $100 million to influence congressional races across the country. The aim is to install the most pro-crypto Congress in history — legislators who would advance the industry’s agenda in Washington and stop the Securities and Exchange Commission from pursuing crypto companies.

The political spending appears to have influenced both parties. In recent days, Harris has made overtures to the crypto industry, suggesting that she would also adopt a softer approach to regulation.

Still, Trump “is seen as the pro-crypto candidate,” the Bernstein analysts wrote, while Harris is expected to continue the “hawkish crypto stance” of the Biden administration.

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This article originally appeared in The New York Times.

By David Yaffe-Bellany
c. 2024 The New York Times Company