(Kitco News) – The first debate between Presidential candidates Joe Biden and Donald Trump is scheduled for this evening, and crypto proponents are eager to see what each side has to say about digital assets.
“What we’re seeing right now is, potentially, the first presidential debate where crypto comes up as a question,” said Anchorage Digital co-founder Diogo Mónica in a Thursday interview with Bloomberg. “That would be amazing.”
The event is already set to be one for the history books as it marks the first time that a sitting president and ex-president will debate in front of millions of viewers. A current president has never debated his predecessor and the event is expected to be dynamic as the hostility between the two candidates – and their respective political parties – is at its highest level in decades.
For crypto proponents, the focus is on Donald Trump, as evidenced by crypto traders placing bets on what Trump will say during the debate, while not much is expected from Biden regarding digital assets.
The topic of inflation is expected to be a point of focus as the debate comes at a time when many Americans are feeling the strain of high prices on the items they use most, including food, energy, housing, and new cars.
Both sides have also floated the idea of raising tariffs on certain goods, including electric vehicles from China, so that discussion is expected to receive a fair amount of air time. Abortion has also been a hot-button issue ever since the Supreme Court – which enjoys a significant conservative majority thanks to Trump – overturned Roe vs. Wade in June 2022, and will likely be addressed in the debate.
With cryptos emerging as a key issue for some voters, especially the younger generation that has become an influential voting block in recent elections, the crypto faithful look forward to the asset class being discussed on a nationally televised stage. They also see it as the latest sign that cryptocurrencies have entered the mainstream and are now a fixture in financial discussions.
The primary focus for pro-crypto voters will be on determining which candidate will be better for Bitcoin and the broader digital asset ecosystem.
“Ahead of tonight’s first presidential debate, crypto traders will be watching keenly for clues as to what November’s election could mean for Bitcoin and the wider sector,” said Neil Roarty, an analyst at Stocklytics. “While incumbent Joe Biden has been rather quiet on the topic, he has directed federal agencies to explore both risks and opportunities, including the potential launch of a central bank digital currency - or CBDC - that would be managed by the Federal Reserve.”
“In typical fashion, Donald Trump has been more forthcoming with his views, claiming Biden has a ‘hatred of Bitcoin’ and calling for remaining Bitcoin to be ‘made in the USA,’” he added. “He’ll point to the meteoric price rise of Bitcoin during his term as president, when the cryptocurrency increased in price by more than 3,800 percent across the four years.”
Biden’s tenure has also seen the price of Bitcoin rise, but to a lesser degree, as the top crypto has risen 70% since the start of his presidency, Roarty noted.
“Biden does hold the edge when it comes to presidential memecoins, however, which are created and traded by crypto enthusiasts although not endorsed by the candidates themselves,” he noted. “The $BODEN coin, modeled after the president, currently holds a market capitalization of $107m, compared to the $82m of $TREMP. Whether this is an indication of voting preference is yet to be seen.”
“The consensus among the crypto community seems to be that a Trump victory would be favourable for the industry,” Roarty said. “Aside from the vocal support he’s given, Bitcoin has tended to perform well during periods of political and economic uncertainty, and a second Trump presidency will likely see more of both.”
Analysts at Bernstein are part of this consensus, with Gautam Chhugani and Mahika Sapra releasing a report saying that a Trump administration could potentially bolster institutional adoption of digital assets with friendly regulations, according to Bloomberg.
“The Republican side sees crypto not just as a vote bank but also a meaningful source of funding,” they said. “If the election sentiment shifts more Republican, crypto would end up as the primary ‘Trump trade’ and hopes of a favorable regulatory regime would change the ‘use-case’ narrative around blockchains.”
Taking the opposite position was Anthony Scaramucci, founder of SkyBridge Capital and former director for communications for the Trump White House, who predicted Biden would win and Bitcoin would hit a new all-time high during his second term.
“I can only give you my guess [for the market top] and so I think we get to $10,000 to $12,000 on Ethereum. And I do think we get to somewhere [between] $170,000 to $250,000 on Bitcoin,” Scaramucci said in an interview on the Unchained Podcast. “I think we’ll see all-time highs for Bitcoin and other assets in this category during a second Biden administration.”
A group of 16 Nobel economists have also come out in favor of Biden, warning that a second Trump administration could wreak havoc on the U.S. economy.
“We the undersigned are deeply concerned about the risks of a second Trump administration for the U.S. economy,” they said in a letter. After elaborating on why they feel Biden would be better overall, they concluded by saying “The outcome of this election will have economic repercussions for years, and possibly decades, to come. We believe that a second Trump term would have a negative impact on the U.S.’s economic standing in the world and a destabilizing effect on the U.S.’s domestic economy.”
While Trump has made significant efforts to differentiate himself from Biden on the crypto front – making multiple positive statements about BTC, crypto, and Bitcoin mining at recent campaign rallies and accepting campaign donations via crypto – not everyone is convinced that the overtures are genuine.
“We would urge caution on reacting to either candidate on crypto,” said analysts at multinational investment bank TD Cowen. “Words may matter, but ultimately we believe it would be a mistake to assume either candidate will deliver.”
Concerns about Trump's sincerity when it comes to crypto are reinforced by the fact that, while in office, Trump told his Treasury Secretary to “go after” Bitcoin and called cryptocurrencies “not money” and “based on thin air.” His change of heart in recent months has prompted some analysts to suggest it was done primarily as a political tool to garner more votes, and he could become less of an advocate for the asset class if he is reelected.
In response to Trump’s campaign rally comment that he “will ensure the future of crypto will be made in America otherwise other countries are going have it,” X user Chris Morris replied, “At the debate next week, Joe Biden should ask Trump ‘How does cryptocurrency work? Tell us how you believe crypto is the future for our young people.’ The verbal diarrhea to follow would be epic.”
While crypto proponents hope the topic will be brought up, others, including Moe Vela, a former adviser to then-Vice President Biden, suggested the topic might take a back seat to more pressing issues for voters.
“While it is unlikely that the moderators will address cryptocurrency in this first debate, they certainly should,” Vela told Cointelegraph. “Crypto is not only a significant economic and financial issue, but it also represents a large segment of millennial, Gen Z, and young professional voters. The outcome of this election could hinge on the crypto community.”
To help prompt host network CNN to include a discussion about crypto, digital asset advocacy group Stand With Crypto set up an online letter-writing campaign to encourage the news channel to include the topic. A spokesperson for the group stated on Wednesday that nearly 2,300 individuals had signed and submitted letters expressing their desire for a question related to crypto.
According to the current stats on Polymarket, a decentralized prediction market platform, the odds of crypto being discussed by either candidate is 48%. On the topic of “What will Trump say during the debate?” the market currently puts the odds of Trump mentioning Crypto/Bitcoin at 56%.
As for who is predicted to win the Presidential election in November. Polymarket bettors currently give Trump a 60% chance of victory, while Biden has a 34% chance.
According to analysts at Bitfinex, even if the topic of crypto is discussed during the debate, it’s unlikely to have much of an effect on the price of Bitcoin.
“The upcoming US presidential debate between Joe Biden and Donald Trump, with its new format and stricter rules to ensure a more structured discussion, is unlikely to have a significant impact on the Bitcoin price but could on the broader cryptocurrency market,” they said in a note shared with Kitco Crypto. “Both Biden and Trump have well-documented stances on cryptocurrencies and financial regulations. The market has already factored in their positions, so any reiteration of these views during the debate is unlikely to introduce new volatility.”
“While the debate might touch on regulatory frameworks that could impact cryptocurrencies, the specifics of such regulations usually emerge from detailed policy announcements and legislative processes rather than debate soundbites,” they added. “What could be interesting and have [a] market impact is discussion around capital gains taxes in general and crypto taxation policies in particular.”
They noted that, as opposed to empty words from politicians that carry little weight in the long run, “The cryptocurrency market is more sensitive to direct regulatory actions, technological developments, and macroeconomic factors. A political debate, even one involving potential future regulatory perspectives, typically doesn’t provide the immediate actionable information that moves markets significantly.”
“However, it’s important to note how Trump has positioned himself as the ‘Crypto President,’” they noted. “Another important factor is that there are coins associated with both Presidents in terms of name and slogans. (Eg: MAGA (make America great again), Trump, Boden). There could be significant movement for ‘Politifi’ tokens during and after the debate depending on their performance as these tokens have turned into speculative assets themselves in terms of the election results.”
The one area where Trump could potentially have a meaningful impact in the future is appointing individuals to roles that soften the government's stance on crypto regulations, Bitfinex analysts said.
"If Donald Trump were re-elected, it could signal a shift towards more favorable regulatory conditions for the cryptocurrency industry in the US. During his campaign, Trump has shown support for Bitcoin and other cryptocurrencies, which contrasts with the current administration's more cautious and regulatory-heavy approach,” they said. “A Trump administration might prioritize creating a clear and supportive regulatory framework, encouraging innovation and investment in the crypto sector. This could lead to increased adoption of digital assets and a more robust integration of cryptocurrencies into the financial system, potentially spurring further growth in the industry."
The CNN-hosted debate between Biden and Trump is scheduled to start at 9 pm EST, and there will be two commercial breaks and no studio audience.
