With the 2024 U.S. election approaching, the cryptocurrency market appears optimistic as it awaits regulatory clarity to lift the sector. Matt Hougan, Chief Investment Officer at Bitwise, believes that upcoming election results could bump Ethereum and other altcoins.
All-time highs loom for Bitcoin, fueled by buoyant institutional adoption and ETF inflows, which appear to be immune to either election outcome.
Bitcoin Solid but Altcoins Need Clarity in 2024
A victory for Republicans could also yield clearer regulatory frameworks for digital assets devotees desire, according to Polymarket, which is currently placing it at just less than 70% probability.
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Analysts say a Republican-led government may be more inclined to pass a pro-crypto bill that reduces uncertainty for the sector. Ethereum and altcoins are more exposed to potential regulatory actions, Hougan argues, and regulatory clarity of the kind he supports would benefit them.
In addition to Bitcoin, the election’s impact reaches beyond Bitcoin, with many altcoins – Solana Aptos, for example – waiting for more definitive classification and further guidance.
Bitcoin is more accessible to position with clearer regulatory standing as a commodity, but Ethereum or any other digital tokens are at greater risk without formal categorization, Hougan said.
Regulatory focus and interest from institutional players in altcoins can push the market higher, with Republicans in the driver’s seat of the presidency, Senate, and House.
Republicans Likely to Drive Altcoin Market Growth
The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have already recognized Bitcoin as a commodity. However, Ethereum and other altcoins need clarity, which hinders broader institutional investment.
According to Hougan, regulatory certainty around these assets would unleash substantial demand and lead to an altcoin rally that would exceed that of Bitcoin. However, Hougan suggests that new SEC leadership could also be critical in providing much-needed clarity.
Although Democrats may take a neutral position on crypto, under a Republican administration, crypto could more easily win regulations that spur growth. This should draw in a wave of institutional investments, which will add a lot of liquidity to the overall market and propel growth for assets from Ethereum to novel altcoins.
The Favorable Regulatory Environment and Surging Interest From Institutions further strengthen the market position. Hougan is hopeful that Republicans winning the elections will trigger institutional involvement in assets beyond Bitcoin.
If this policy direction proves to be sheltered by the post-election political landscape, he predicts a huge gain in the value of altcoin.
Bitcoin Thrives Amid Institutional Support and ETFs
Despite the political climate, the institutional adoption of the cryptocurrency market, led by Bitcoin, remains at its peak. Despite election uncertainties, the asset’s value remains strong thanks to emerging spot Bitcoin ETFs and growing institutional interest.
Bitcoin’s continued growth does not hinge on political outcomes, Hougan stresses, highlighting that Bitcoin is no longer a political plaything but an entrenched part of the financial ecosystem.
Most participants in the cryptocurrency space feel that the situation will not greatly affect their investments, especially since no drastic decisions have been made yet regarding the legality of cryptocurrencies at the state level, and UPS could potentially influence it more in favor of growth.
Hougan says the key to the adoption and success of these assets is regulatory certainty. Bitwise CIO believes that in 2024, we will see improvement in the market, while in 2025, it will be even more expanded thanks to beneficial regulations and support from institutions.
