US Election Countdown Sparks Crypto Chaos: Are Altcoins the Riskiest Bet
Countdown to U.S. election begins: altcoins emerge as crypto world’s riskiest trade
After underperforming Bitcoin for much of the year, smaller cryptocurrencies such as Doge and Solana may end up facing the most risk following the U.S. presidential election. Bitcoin rose as much as 4.6% to $70,165 on Tuesday, about 5% below its record high of around $73,800 set in March. The largest cryptocurrency by market value has gained more than 65% this year.
Dogecoin rose as much as 17% on Tuesday, in part because longtime Dogecoin supporter Elon Musk said he would create a Department of Government Efficiency (DOGE.) if Donald Trump wins the election.
“For Bitcoin, the U.S. election is less important,” said Zaheer Ebtikar, founder of cryptocurrency fund Split Capital. “For altcoins, if Kamala Harris wins, they may not rebound as much. They are the biggest winners or losers in this election.”
Altcoins, which refer to cryptocurrencies smaller than Bitcoin, have tended to perform better in past market upcycles, especially as investors have turned to smaller-cap cryptocurrencies following Bitcoin’s surge. However, in the past year, the overall performance of alternative coins has been difficult to surpass Bitcoin, except for memecoins, which have no practical utility. Dogecoin is considered by many to be the original meme coin.
Ebtikar also said that a Harris win could mean greater regulation of the crypto industry, while Bitcoin and Ethereum are likely to survive because they are seen as more decentralized than other currencies. Cryptocurrency supporters generally believe that a Trump victory would be more beneficial to the cryptocurrency industry.
Other traders believe that overall, the overall election results will be good for the cryptocurrency market.
“In the medium term, we think the market will move higher no matter who wins as we say goodbye to the election and back to macro and the Fed,” said Shiliang Tang, president of major trader Arbelos Markets.