Galaxy Digital: Trump’s Crypto Policies Offer 'Explosive Upside,' While Harris Presents 'Limited Downside Risk'

Kamala Harris may take a more favorable approach to cryptocurrency than the Biden administration, but Donald Trump is seen as the most crypto-friendly option in the upcoming U.S. presidential election, according to research by Galaxy Digital.

Alex Thorn, head of research at Galaxy Digital, presented a policy scorecard evaluating the candidates' stances on cryptocurrency. The scorecard suggests that a Harris presidency would present limited downside for the industry and could be a better option than continuing under Biden. However, it identifies Trump as offering the most positive outlook for crypto.

Galaxy Research analysts have expressed optimism that Harris could be more accommodating to crypto than Biden has been, based on actions and rhetoric observed so far.

Key Differences in Taxation and Bitcoin Mining Policies

The analysis highlights significant contrasts between Harris and Trump on four key issues: taxes, Bitcoin mining, self-custody, and banking regulations.

On taxes, Harris is viewed as "extremely hostile" to the crypto industry, given her pledge to reverse Trump-era tax cuts, especially for the wealthiest Americans. In contrast, Trump is expected to bring more clarity and potentially favorable reforms to digital asset tax policies.

Bitcoin mining presents a similar divergence. Biden has proposed a 30% tax on crypto mining, while Harris has been less aggressive, though still somewhat unfriendly in her stance. Trump, on the other hand, is seen as highly supportive of the industry, due in part to meetings with miners and his belief that Bitcoin mining is a form of domestic manufacturing.

Divergence in Banking and Self-Custody Policies

When it comes to banking regulations, Harris and Trump have markedly different positions. While Harris may moderate Biden’s restrictive “Operation Chokepoint 2.0” and open banking access to the crypto industry, Trump has pledged to fully eliminate the program, allowing national banks to engage with blockchain technology. Trump has also been a vocal opponent of a central bank digital currency (CBDC).

Regarding self-custody of digital assets, both candidates take a relatively neutral stance. Harris has not made any direct statements on the matter, though some of her advisors have expressed hostility. Trump, meanwhile, has shown some support, promising to defend self-custody rights at a recent Bitcoin conference.

Impact on Bitcoin and Altcoins

Bitcoin (BTC) is largely absent from discussions about regulatory changes, indicating that it will remain relatively unaffected regardless of who wins the election. However, the future of altcoins could vary significantly depending on the outcome.

A Trump presidency could bring long-awaited regulatory clarity, allowing altcoins to thrive, with tokens like Uniswap’s UNI standing to benefit. In contrast, a Harris administration might pose more risks to these alternative digital assets.

In summary, while a Trump presidency presents an “explosive upside” for the crypto industry, Galaxy Digital’s analysis sees limited downside if Harris wins, as her policies are still more favorable than Biden's.