Is The Crypto Market Heading to Its Most Decisive Week in 2024?

• The 2024 U.S. presidential election is influencing global markets, with crypto voters favoring Donald Trump.
• This year marks the most crypto-influenced election ever, and it will likely have a big impact on the market.
• Weak Jobs Report concerns the market, but experts still believe in a rate cut at the next FOMC meeting.

Is The Crypto Market Heading to Its Most Decisive Week in 2024?

As we reach close to the end of an overall positive calendar year, crypto investors brace themselves for perhaps the most decisive and important week of 2024. 

In the most crypto-influenced election ever, current Vice President Kamala Harris leads by a single percentage point over former President Donald Trump. The statistical tie announced by a Forbes poll underscores the razor-thin margins in an election where crypto policy and digital economy stances have emerged as defining issues for many voters.

Up to 16% of voters can still change their minds on election day, meaning that the result is still open for both sides. 

The cryptocurrency community often favors Trump for his pro-crypto stance, and desire to use U.S.-dollar-pegged stablecoins as a tool to solidify the greenback influence in foreign trade. However, Kamala Harris also adopts a crypto-friendly approach, even announcing a crypto framework to protect black voters.

However, the real issue for Democrats breaking the crypto-barrier among voters could lie elsewhere. The Biden Administration’s SEC chairman – Gary Gensler – has faced a lot of criticism for his reactionary approach to regulating cryptocurrencies. Even other SEC members have openly criticized the Chairman for his altcoin approach. 

Donald Trump openly stated in July that one of his first measures as President would be to fire Gary Gensler, even though Gensler would likely step down after the election. As for the Democrats – some of its major donors like Mark Cuban are pushing for the immediate replacement of Gensler as soon as Harris – hypothetically – takes office.

Pre-Election Market Volatility

Digital assets are being affected by election estimates. Most notably, Dogecoin became one of the most affected by politics after multi-billionaire Elon Musk mentioned the memecoin during a few pro-Trump presidential rallies. 

Analysts estimate that a Trump win could catapult Bitcoin to a new all-time high – citing that the Republican is likely to facilitate BTC mining regulations in the country. In September, an analysis from Bernstein stated that a Trump victory could catapult BTC to upwards of $80,000.

In an election heavily backed by crypto – market volatility is expected to peak as investors brace for possible regulatory shifts.

New Interest Rate Decision

As if the U.S. election wasn’t enough to cause uncertainty among crypto investors – the Federal Reserve will be hosting a new FOMC meeting only 2 days following the election.

On November 6-7 – Jerome Powell alongside other chairmen will announce the FED’s decision for America’s new interest rate moving forward. This key meeting comes after the first defacto interest rate cut in years (-0.5%) – and risky assets investors are closely monitoring to see if the U.S. will continue to slash rates.

Analysts have been predicting another cut of 0.25% in the upcoming meeting. However, an extremely weak U.S. Jobs Report on November 1st supported the perspective that inflation and unemployment are still comfortably under control for another interest cut.

However, it is important to note that the weak number of new jobs created in October coincides with a period of instability after hurricanes and major worker’s strikes have happened. In all likelihood, experts still believe that a 0.25% interest rate cut is coming on November 7.

The outcome of the election, paired with the Federal Reserve’s imminent interest rate decision, puts crypto investors on edge as they anticipate major market shifts. With candidates taking diverging stances on digital assets and regulations, the winner could set the tone for crypto’s role in the U.S. economy. If interest rates decrease, it may open doors for risk assets like crypto to rally. But if rates hold, the market could see more cautious moves.