Post-election regulatory environment is more important for Ethereum, altcoins: Bitwise CIO

The regulatory setting for Bitcoin is improving, Bitwise Chief Investment Officer Matt Hougan said Wednesday, regardless of whether Donald Trump or Kamala Harris wins. That could be positive not just for bitcoin but especially for other cryptocurrencies. 

Bitcoin's price has been approaching new all-time highs in recent days, partly driven by momentum heading into the 2024 U.S. election on Nov. 5. 

"Of course, in the short term, crypto favors a Trump victory over a Harris victory, but really, Bitcoin doesn't need Washington to succeed," Hougan told Yahoo Finance. "Institutions are moving into the space, adoption is rising, ETF flows are happening. I think we go higher either way."

Most national polls are still relatively split, though former President Trump's lead on Polymarket has continued to rise to its highest level yet, nearing 70%, while Vice President Harris is at her lowest odds since she took over the ticket in August. The Ethereum-based betting market's popularity surged this election season, with more than $2.6 billion in cumulative bets on the outcome.

The rising Polymarket odds of a Republican sweep for the presidency, Senate and House could pave the way for passing a series of crypto-related bills, Presto analysts said Tuesday. A Trump win would have more impact on Ethereum and other altcoins, according to the Bitwise CIO.

Regulatory clarity 

"I think the regulatory clarity you're talking about actually matters more for the so-called altcoins, for Ethereum on down," Hougan said. "Those are more exposed to regulatory risks, so I would expect an altcoin rally, even more so than a Bitcoin rally in the event of a Trump win. But regardless, I think both are moving higher."

Hougan said Bitcoin already has more regulatory clarity than Ethereum and other digital assets thanks to the U.S. Securities and Exchange Commission and CFTC having declared it a commodity and the embrace of spot bitcoin ETFs. That's not true for solana, aptos and other altcoins, he said.

"I suspect if we get a new SEC, that will become clear, that will drive institutional adoption, and we'll see that rising tide lift all of those boats," Hougan said. In either case, he said 2025 will look even better than 2024.

Earlier this month, Bitwise predicted a bitcoin melt-up to the $80,000 level by the end of this year.

“To thrive, bitcoin doesn’t need politicians. It just needs them to get out of the way. And barring a Democratic sweep of both houses of Congress and the White House, I suspect they will, with the Democrats taking a more neutral approach to the industry,” Hougan wrote in an Oct. 9 memo to clients.