[US Presidential Election and Virtual Assets] ② Will 'Gambler' Trump’s Instinct Be Right Again?

Interview with Three Virtual Asset Experts
Republican Party Includes Virtual Asset Content in July Policy Guidelines
Democratic Party Remains Silent... Lacks Specific Promises

From the left, Seongwook Hong, Researcher at NH Investment & Securities, Seokmun Jeong, Head of Presto Research Center, and Gyeongpil Jang, Head of Jangle Research Center. Photo by each company

"The impact on virtual assets would be worlds apart depending on whether candidate Donald Trump or candidate Kamala Harris is elected."

This is the overall assessment given by domestic virtual asset industry experts regarding the 2024 U.S. presidential election contest between Republican candidate Trump and Democratic candidate Harris. Trump has positioned himself as a 'pro-virtual asset president' and has announced policies aimed at making the U.S. 'the crypto capital of the planet,' even releasing specific pledges. On the other hand, Harris, who was a political ally of President Joe Biden, has remained silent without additional pledges, dashing hopes for a shift in policy direction. One of the points to watch is whether Trump’s intuition, which helped him win in the 2016 U.S. election riding on the 'Shy Trump' vote, will work again this time. There is also analysis that the crypto advocates' votes could act as a 'casting vote,' with differing judgments between the two parties.

On the 13th, three virtual asset experts who met with Asia Economy agreed that Trump’s affection for virtual assets would help the market, industry development, and legal institutionalization. Regarding Harris, there was initial hope that she would show a more crypto-friendly stance compared to President Biden, but skepticism arose due to the absence of follow-up pledges.

"If Trump is elected, a personnel reshuffle in the U.S. government is expected... SEC Chair dismissal"

Former U.S. President Donald Trump, the Republican presidential candidate [Image source=Yonhap News]

Jung Seok-moon, head of Presto Research Center, said, "(If Trump is elected) the best thing is that if a crypto-friendly president and the Republican Party gain power, there will be a significant personnel reshuffle in the (U.S.) administration," adding, "I don't think he will retract statements like filing lawsuits or saying 'I will fire Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC),' as was common during the previous Biden administration."

He also said, "In the 2016 U.S. election, Trump won by gathering the 'Shy Trump' votes, defeating strong competitor Hillary Clinton at the time," adding, "Beyond just political fundraising issues, it seems he values the votes of virtual asset supporters this time as well. Conversely, the Democrats seem to consider this less important, but we need to watch whether Trump’s judgment will prove correct."

Hong Sung-wook, a researcher at NH Investment & Securities, noted, "It seems he is targeting the votes of young Americans who are very interested in digital assets beyond personal beliefs," and added, "He also seems to care about donations coming into the Republican Party and others." He further explained, "The Republican Party itself advocates minimizing (industry) regulations, and since virtual assets are also an industry, they seem to think the U.S. should be number one for employment effects."

Jang Kyung-pil, head of the Zaggle Research Center, said, "Trump aims to resolve both the SEC’s virtual asset regulations and the Operation Choke Point issue (a method by which the U.S. government suppresses the virtual asset industry by scrutinizing banks and other financial companies)," adding, "From the perspective of virtual asset operators, money will flow in and regulatory uncertainty will be resolved, creating a favorable business environment."

The section related to virtual assets in the policy platform announced by the Republican Party last July. Source: Screenshot from the website of the U.S. nonprofit organization 'The American Presidency Project'

The virtual asset industry’s expectations for Trump and the Republican Party began to intensify in July. The Republican Party announced its policy platform in July, including specific measures such as easing virtual asset regulations, support, and guaranteeing free Bitcoin mining and custody rights. This helped alleviate some doubts about the sincerity of Trump’s statements since May.

Trump’s aggressive moves culminated in the 'Bitcoin 2024' conference. On July 27 (local time), Trump delivered the keynote speech on the last day of the conference, stating he would stockpile and hold virtual assets as 'strategic assets.' This means he intends to keep Bitcoin seized and held by the U.S. Department of Justice (DOJ) from drug dealers, illegal hacking groups, and other criminal organizations without selling it, holding it long-term. Strategic assets are assets that the U.S. government stockpiles strategically in preparation for emergencies such as war, including various asset classes and essentials like oil, gold, and agricultural products.

Jung Seok-moon said, "Some criticized Trump’s remarks for lacking specifics, but Senator Cynthia Lummis of the same party announced a detailed bill that day, so I think it’s sufficient," explaining, "Senator Lummis introduced the 'BITCOIN ACT,' which includes holding Bitcoin as a strategic asset for the next 20 years."

The BITCOIN ACT is also an acronym derived from 'Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide.' The core of the bill includes ▲ Strategic Bitcoin Reserve (SBR) Act ▲ Systematic Bitcoin Purchase Program ▲ Comprehensive National Custody Policy.

Jang Kyung-pil said, "Bitcoin and other virtual assets have already established themselves as more than just currency among institutional investors and some government agencies for the past 2-3 years, but it will take time for the public to accept them as a store of value," adding, "If Bitcoin’s narrative starts at the level of U.S. politics and the ruling government, the time to raise public awareness (of virtual assets) will likely shorten."

Harris, No Additional Specific Pledges: "Expectations Were Excessive"

Vice President Kamala Harris (right), the Democratic presidential candidate in the United States, and President Joe Biden

Conversely, there is significant market skepticism regarding Democratic presidential candidate Harris. Initially, when Harris emerged as the Democratic candidate following President Biden’s resignation, there was hope for a major shift in virtual asset policy. According to recent reports by U.S. economic media Bloomberg, political donors explicitly demanded Harris dismiss SEC Chair Gensler. However, the only statement from Harris’s campaign policy senior advisor Brian Nelson at the Democratic National Convention was that they would support policies ensuring the continued growth of emerging technologies and related industries. There are no follow-up pledges. Speculative reports suggest Harris wants to continue dialogue with the virtual asset industry, but these rumors have not been officially confirmed.

Jung Seok-moon said, "(Since nothing specific has been announced) I think the initial expectations were excessive," adding, "Logically, if the Democrats come to power, it is reasonable to assume that Harris, who served as vice president under Biden, and the existing power network including Senator Elizabeth Warren will remain."

Senator Elizabeth Warren of the U.S. Democratic Party
[Photo by Yonhap News]

Senator Elizabeth Warren led the introduction of the anti-virtual asset bill 'Digital Asset Anti-Money Laundering Act (DAAMLA)' in July last year. The bill classifies virtual asset wallet providers and miners, including virtual asset service providers, as financial institutions. Warren is a prominent critic who described virtual assets as "a new threat the world faces." According to U.S. virtual asset media Unchained Crypto, in August, Harris appointed two former Biden aides, including Bharat Ramamurti, who served as economic policy deputy director for Warren’s 2020 Senate campaign, as advisors, drawing criticism that "this is evidence Harris will continue virtual asset regulations."

Researcher Hong Sung-wook also said, "There are hints that (the Democratic stance) will not change, and the fact that the SEC continues to enforce strict regulations supports this," explaining, "Harris is running as a presidential candidate, but the SEC’s continued tough stance suggests Harris tolerates this." He cited Harris’s reluctance to mention virtual assets as a basis for this judgment.

Jang Kyung-pil said, "From a macro perspective, the September Federal Open Market Committee (FOMC) interest rate cut issue is seen as positive, but if Trump is elected, it will be a 'positive + positive' combination, and if Harris is elected, a 'positive + negative' combination," adding, "From an adoption perspective (the widespread acceptance of blockchain technology), if Trump wins, many new startups will emerge and it will be positive, but if Harris wins, there will likely be negative effects, so price volatility will open both ways."