Altcoins Become Crypto’s Biggest Risk Trade as Election Draws to a Close

As the 2024 U.S. presidential election approaches, the crypto market is abuzz with anticipation. While Bitcoin (BTC) has been the talk of the town, altcoins have quietly emerged as the crypto market's biggest risk trade. The contrasting policy approaches of Donald Trump and Kamala Harris towards cryptocurrency regulation could significantly impact the performance of different crypto sectors post-election.


Analysts at The Street and Cointelegraph suggest that a Trump victory could lead to a shift from meme coins to utility-driven altcoins. Improved regulatory clarity and increased investor confidence could boost the performance of projects like Solana, Cardano, Polygon, Filecoin, and Near Protocol. These projects have been flagged by the SEC, suggesting they may be undervalued due to regulatory concerns rather than intrinsic issues.

Conversely, a Harris victory might keep meme coins in play. Uncertainty over regulatory treatment could steer investors toward lower-stakes, speculative plays, maintaining the status quo in the altcoin market.


Investors are closely watching the election results, with a strategic wait-and-watch approach favored by many. A bullish scenario for Bitcoin and select altcoins is possible if Trump wins, while a Harris victory could present a potentially bearish outlook. In the months ahead, tax policy for 2025 could also play a role, with many financial advisors already discussing tax mitigation strategies depending on the outcome.

Historical election cycles suggest that altcoins may experience increased volatility post-election, presenting both risks and rewards. Positive market performance in the three months before election day has typically favored the incumbent party. With the market seeing record highs since Harris's entry into the race, history suggests the Democratic side might have an edge. However, Trump's favorability has seen a recent uptick, showing how quickly momentum can shift.

In conclusion, as the 2024 U.S. presidential election draws to a close, altcoins have become crypto's biggest risk trade. The contrasting policy approaches of Trump and Harris towards cryptocurrency regulation could significantly impact the performance of different crypto sectors post-election. Investors are closely watching the election results, with a strategic wait-and-watch approach favored by many. The potential for increased volatility and shifting market dynamics presents both risks and rewards for altcoin investors. As the crypto market continues to evolve, staying informed and adaptable will be key to navigating the ever-changing landscape.