U.S. presidential candidate Kamala Harris has voiced support for the cryptocurrency industry during a private, closed-door event in New York City. This unexpected announcement has left many shocked, particularly as crypto was not part of her original policy platform.
Despite this, her support has already sparked a surge in the crypto markets, leaving investors wondering if this could lead to a lasting shift in political support for digital assets.
The Crypto Flywheel Effect in Politics
Harris’ backing of cryptocurrency seems to be part of a broader pattern. Here’s what we like to call the “crypto flywheel of politics”:
- One candidate supports crypto — In this case, Donald Trump has been vocal in his support for the crypto industry.
- Crypto markets rally — This initial support drives up market activity, drawing attention to the industry.
- Voters take notice — As the markets rise, crypto becomes more of a factor for voters, pushing it into political debates.
- The opposing candidate feels the pressure — Kamala Harris seems to be reacting to this pressure by now supporting crypto.
- The opposing candidate caves — Harris, like many politicians before her, has adjusted her stance to accommodate growing voter interest in crypto.
- Markets rally again — With both candidates on board, the crypto markets surge further.
- Crypto becomes a core election issue — As crypto continues to pump, it becomes a key consideration for voters.
- Both candidates double down on their crypto support — In a bid to win voter favor, Trump and Harris try to outdo each other in their support for the crypto industry.
- The market goes parabolic — By this point, crypto is in the headlines, and millions of voters see it as a key election issue.
- The election becomes a crypto-driven event — Voters are swayed by the potential financial gains, focusing on which candidate can push the market higher.
Could the Crypto Boom Lead to a Post-Election Correction?
Given Harris’ new stance, the likelihood of a pre-election boom is high. Both she and Trump now have significant vested interest in proving that they can be pro-crypto leaders. As a result, we can expect to see more crypto-positive rhetoric leading up to the election. The markets are responding positively, with many speculating that this could be the start of a long-term rally.
However, there are risks involved. The crypto market has a history of reacting to short-term political news, but often experiences corrections once the hype dies down. Experts believe that while crypto whales and political forces may be propping up the market now, this could all change after the election.
What Comes After the Election?
While the political flywheel might boost crypto before the election, there’s growing concern about a post-election correction. If the election focuses heavily on crypto, but neither candidate follows through on their promises, we could see the market dip once the political spotlight moves elsewhere.
Conclusion: Short-Term Gains, Long-Term Uncertainty
For now, the crypto community is riding high on political endorsements. Kamala Harris and Donald Trump’s support has given the industry a boost, but whether this translates to long-term stability is still up in the air. Investors should be prepared for volatility as political promises may shift post-election, potentially leading to a sharp market correction.
