Cryptocurrencies volatile amid US election uncertainties

By Mertkan Oruc

ANKARA (AA) – As the US presidential race tightens, cryptocurrency markets face volatility, with contrasting approaches from Democratic candidate Vice President Kamala Harris and Republican candidate Donald Trump adding to market uncertainty.

The cryptocurrency market has experienced fluctuations, with its total value dipping below $2 trillion in September and rising to $2.4 trillion in October, reflecting Federal Reserve rate cuts and election dynamics.

In the closely contested race, outcomes in seven swing states could be decisive, with recent polls showing Trump pulling ahead, sparking gains in the cryptocurrency market.

Serkan Yesilyurt, an economics professor at Bahcesehir University in Istanbul, told Anadolu that Trump has a “moderate and definitive approach to cryptocurrency markets,” while Harris lacks “a clear view” on the issue, leading to expectations that a potential Trump win could positively impact cryptocurrencies.

“Harris’ intention to maintain the current expansive monetary policy and active government spending might also reflect positively on cryptocurrencies,” Yesilyurt added, though he noted that the issue is not a primary agenda item for either candidate, meaning immediate decisions are unlikely post-election.

Nurullah Mahmut Dundar, a lecturer at Istanbul Medipol University, emphasized rising investor interest in cryptocurrencies following the approval of Bitcoin exchange-traded funds (ETFs), as these developments have boosted general acceptance of crypto assets.

“The Fed cut its interest rate for the first time in four and a half years... the decision was received by cryptocurrencies with welcome, while the European Central Bank’s rate cut and China’s stimulus packages also positively impacted crypto assets; however, investor overview of crypto remains risky as geopolitical tensions continue and a permanent recovery in the global economy has yet to be seen,” Dundar said.

Trump’s mention of Bitcoin marked a historic first for an election candidate, sparking excitement across the crypto market, further fueled by billionaire Elon Musk’s public support for Trump.

Dundar noted that the president-elect may support a more “crypto-friendly” stance by potentially nominating an innovation-focused US Securities and Exchange Commission (SEC) chairperson.

“The market inflows of large financial institutions, such as BlackRock and Fidelity, have the potential to stabilize fluctuations by increasing institutional confidence, since while individual investors act in the short-term for high return expectations, institutional investors focus on long-term strategies,” he said.

“The decisions of the president-elect after the elections will determine the direction that institutional investors will take,” he added.

*Writing by Emir Yildirim in Istanbul