Bernstein analyst: Harris' rise leads to Bitcoin weakness

Author: José Oramas, Crypto News; Compiler: Baishui, Golden Finance

• Bernstein analysts believe that Bitcoin's decline is related to Kamala Harris's support in the polls against Donald Trump, and investors believe that Harris's administration may be unfavorable to cryptocurrencies.

• The report said that Harris's rising odds on Polymarket kept Bitcoin within a limited range, preventing it from reaching previous highs.

• Overall, cryptocurrency remains a sensitive political issue, and both parties recognize its importance as the US presidential election approaches.

Bitcoin is plunging because of Kamala Harris.

Well, here’s what Bernstein analysts are suggesting:With Harris winning over former President Donald Trump in the polls, sentiment in the cryptocurrency market appears to be taking a negative turn, primarily because some investors and crypto community members believe that a Harris administration could be bad for crypto.

This may not be surprising, as the Biden administration has been criticized for being too strict on crypto. However, the criticism can be primarily pinned on U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler.

In addition, Bernstein analysts note thatHarris’ rising odds on Polymarket are making the cryptocurrency market nervous, keeping Bitcoin in a limited range and preventing it from reclaiming its previous highs of around $70,000 (A$106,000) seen in June.

Polymarket Phenomenon

Oh, prediction markets… You don’t need a research firm to publish poll results or conduct extensive research and analysis on the political landscape. Just one look at Polymarket and you’ll know who will be the next president of the United States.

Source: 2024 Presidential Election Winners, Polymarket

That’s because Polymarket has developed an excellent product-market fit (PMF). Its simple and straightforward approach to cryptocurrency betting makes it a reliable indicator of investor sentiment, especially in the political space. The more bettors bet on Harris, the more it suggests they are becoming more confident in her chances of winning the election.

It’s simple: If bettors believe a particular candidate is gaining momentum, that can generate bullish sentiment, which in part drives up crypto prices. Conversely, if confidence in a particular candidate declines, it can cause panic.

“Our reading of current market sentiment is that a Trump win is bullish, while a Harris win is bearish (at least as far as immediate market reaction is concerned),” the report reads.

Crypto as a Sensitive Political Tool

During his tenure, Gensler vigorously enforced regulations for cryptocurrency companies (and the industry as a whole), having infamously called them plagued by “swindlers, fraudsters, and scam artists.”

Gensler’s stance on cryptocurrency regulation has drawn a backlash from the industry, with key figures like Coinbase CEO Brian Armstrong arguing that heavy (and unclear) regulatory oversight stifles innovation and pushes businesses to more crypto-friendly countries.

All in all, it looks like cryptocurrency will remain a sensitive topic for political developments, especially now that the U.S. presidential election is scheduled for November. It’s no wonder that both parties recognize the importance of the cryptocurrency industry. Whether they appeal to voters or actually care about the industry remains to be seen in the coming months.