You may think the U.S. presidential election is under dispute. It’s not.
The president’s team claims fraud and tweets all sorts of evidence, but they don’t present any of that evidence in court. Even their “independent advisors” found no fraud. I suspect President Trump knows the fraud claims won’t stick, and in any event, he’s told his administration to let his successor, Joe Biden, take office.
Unless something changes drastically, the U.S. will have a new president in January.
Lest anybody forget, the Trump administration hated cryptocurrency.
If you believe people who worked for Trump, the president ordered his administration to “go after” bitcoin.
His Treasury Secretary called crypto a national security issue. His law enforcement agencies worked to de-privatize transactions. One of his former financial regulators bragged about conspiring to kill the 2017 bull market.
You can expect the Biden administration to take a more favorable view. Not sure it could get any worse.
Bitcoin ETF, anybody? Safe harbor for small investors? Sane tax guidance and regulations? U.S. federal funding for blockchain projects and blockchain-for-government efforts?
Those things are a lot more likely with this administration than the outgoing one.
Some of the President-elect Biden’s biggest donors have strong ties to crypto. Silicon Valley has a lot of influence in Democratic Party circles and Wall Street has its hands in both parties’ pockets.
If you believe the rumors about who Biden will appoint as cabinet officials and top advisors, you will find a slew of pro-crypto, pro-blockchain appointees, including his likely securities regulator and Secretary of Labor. In a boon for everybody who loves BRRR memes, his pick for Treasury Secretary is an inflation dove who has historically supported low interest rates and cheap money (her stance on crypto is not as clear).
Also, the Democratic Party skews younger, both in absolute numbers and as a proportion of people who register as Democrats compared to Republicans. Many surveys show young people have more positive opinions of cryptocurrency than old people.
Still, presidents can only do so much. They don’t make laws. That’s Congress’s job.
U.S. regulations come from financial laws that are 50 to 86 years old. Until those laws change, the president has limited power. He can issue regulatory approvals and guidance, perhaps sign a few executive orders. Significant actions but hardly game-changers.
So it really depends on how much emphasis the new administration puts on cryptocurrency and pushing Congress for crypto legislation.
If we’re speculating on hypotheticals, I can imagine an interesting dynamic could play out within the Democratic Party.
This party has a lot of pro-Wall Street people and a lot of anti-Wall Street people. The pro-Wall Street people want institutional and government involvement to clean up the cryptocurrency industry and make money from it, while the anti-Wall Street people think cryptocurrency can destroy what they see as an unfair system that rewards rich people for ripping off poor people and small businesses.
Maybe they’ll find kindred spirits with Republicans that value free markets, individual liberties, small government, and low taxes. As a result, the U.S. will finally get sensible cryptocurrency laws.
Or not. It’s fun to speculate.
In any event, cryptocurrency is a bipartisan issue — namely, neither party cares about it much. It may rise in prominence as the market attracts more investment and prices go up, but it’s anybody’s guess how Washington will respond.
Until he takes office on January 20, 2021, Biden can’t do anything. A lot can change in two months.
Whatever happens, I doubt it will affect crypto. The entire market doubled during our previous lockdown and big money gobbled up tons of bitcoin. It continues to rise despite lockdowns in some parts of the world and new COVID-19 restrictions in some parts of the U.S.
I can’t see why another lockdown would get a different result.
Let’s hope we don’t have to find out.
While it’s nice to think the Biden administration will bring sanity to the U.S. regulatory and legal treatment of bitcoin and the cryptocurrency industry, it doesn’t matter for prices.
Bitcoin is a global commodity and Wall Street has built the legal, operational, and regulatory infrastructure to move lots of money into the markets. Soon, greed will take over.
It probably already has.
In the long run, bitcoin’s price will continue to rise no matter what the Biden administration does, as will the entire crypto market.
But prices will not go up forever.
Once we get the inevitable crash that comes at the end of each market cycle, we will need good laws, fair regulations, and reasonable protections for businesses and investors. Only then can these open, permissionless financial systems grow, thrive, and deliver the freedom, innovation, and efficiencies everybody expects they will.
No industry thrives in chaos. Speculation alone can’t sustain cryptocurrency.
Let’s hope the Biden administration cares about that, too.
Mark Helfman publishes the Crypto is Easy newsletter. He is also a top writer on Medium for bitcoin. His books, Consensusland and Bitcoin or Bust: Wall Street’s Entry Into Cryptocurrency, explore the social, cultural, and business challenges of cryptocurrency. Learn more about him in his bio.
Originally published on Voice.com.