As of this article's writing, most mainstream news outlets have declared Joe Biden the winner of the presidential election. Although Trump's legal team threatens to extend the process out by a few weeks, it seems as though the next 4 years will be led by a Biden-Harris administration.
What does this mean for the crypto market? Let's take a closer look.
Biden's Position on Crypto
Joe Biden does not have a stated position on cryptocurrency. He does look to build a team that would be slightly more crypto savvy than one picked by President Trump. However, Trump really had no hardcore position on bitcoin, either. It would seem as though any policy that makes its way to the White House will be spearheaded by legislators with a bone to pick.
Keep an eye on California's 30th Congressional District congressperson Brad Sherman. The balding enemy of crypto has proposed legislation to completely ban it. He didn't even do the usual politician's trick of hiding his motives, stating straightaway that bitcoin and other digital currencies have the ability to undermine the dollar and the US world economic position. As a Democrat, Sherman will definitely have more access to the White House than in a Trump administration. He will have to fight through major opposition in the legislative branch, as both houses of Congress look to maintain a staunch Republican presence.
Many analysts believe that the White House hasn't taken a stronger position on bitcoin and crypto in general because the market is still too small. Although reports have come out of Washington that the federal government is looking towards a digital currency and preparing for a possible "bitcoin revolution," a growing market cap will likely force Biden to make a public statement and keep to a position.
Regulators on Capitol Hill are definitely watching the crypto space, although their ability to understand the positives of a free crypto world remain to be seen. Top regulators have gone so far as to congratulate the Ethereum chain for its advancements in defi. This is likely because the government realizes that it cannot stop this market no matter how much regulation they bring down — at least not without the willing participation of key players in the industry.
Biden insider and former presidential candidate Andrew Yang may provide a positive influence for Biden to consider crypto. Yang showed himself to be a forward thinking financial personality during and after his campaign. He was the main proponent of blockchain voting during his campaign, so he at least understands the possible use cases of blockchain tech in general, if not blockchain based currencies.
It remains to be seen what other Democrat public figures will say. Elizabeth Warren, who built her reputation on harsh criticism of banks, does not seem to understand the differences between the institutional fraud of traditional finance and the fly-by-night scams of defi. (One forces retail savers and investors in through regulation, scale, boldfaced lies and government bailouts, and the other is simply a pitfall to be avoided through personal research.)
Bitcoin vs. Central Bank Digital Currencies (CBDC)
Unlike most analysts, I don't believe that untethered currencies (UTCs) like bitcoin are in direct confrontation with CBDCs. The central banks may believe so, and may attempt to reduce the adoption of UTCs to clear the path for their currencies. They are likely to fail. Although the current generation of retail investors are hardly the political warriors of bitcoin's early days, the mere fact that bitcoin adoption means decentralization protects it from political and regulatory attacks in the US.
Not to mention that bitcoin currently serves as an objectively superior currency in many countries that will not let it fall so quickly. Regardless of what US regulators and big private central banks try to do, they will have quite a battle in suppressing the use of UTCs. Personally, I believe that bitcoin and other UTCs will remain in use in emerging markets and with people in established economies who were smart enough to get it before 2023. Good luck to the government if they try to confiscate bitcoin like they did gold — only suckers without real knowledge of digital custody and decentralization will capitulate to such an order.
Overall, I don't believe that a Biden presidency can stop the expansion of bitcoin adoption even if it takes an adversarial stance. It may shake out weak hands who are just looking for short term profit if regulation slows adoption, but crypto has established itself as the most powerful new financial force in the world. Good luck to any president who tries to stunt the forward progress of humanity.