Crypto Stocks Drop as Kamala Harris Gains Momentum After Debate and Taylor Swift Endorsement

Crypto Stocks Drop as Kamala Harris Gains Momentum After Debate and Taylor Swift Endorsement

U.S. cryptocurrency stocks fell on Wednesday after Democratic candidate Kamala Harris gained the upper hand in a heated presidential debate against her Republican opponent and crypto advocate, Donald Trump. Harris' strong debate performance, coupled with pop star Taylor Swift’s endorsement, saw her betting odds improve to 56%, up from 53% before the debate, according to online betting platform PredictIt. Meanwhile, Trump's odds dropped to 48% from 52%.

Trump, who has positioned himself as a pro-bitcoin candidate, had previously promised more favorable crypto regulations if re-elected, aiming to attract support from the industry, which has criticized the current administration for regulatory overreach. In July, Trump encouraged the industry, stating, "Never sell your bitcoin," and pledged that a Trump administration would hold bitcoin as a store of value.

Despite crypto not being a direct topic of the debate, market sentiment began shifting in favor of Harris. Analysts, including Valentin Fournier from BRN Research, noted that the crypto market outlook has become less optimistic due to Harris' rising chances of victory. Harris has yet to announce a clear policy position on cryptocurrency.

Bitcoin, the world’s largest cryptocurrency, pared its losses following the debate and was down 2%, while ether dropped 2.6%. Meanwhile, U.S.-listed crypto stocks took a hit. Riot Platforms, Marathon Digital, and Hut 8 fell between 3.6% and 5.3% in pre-market trading. Software company MicroStrategy, known for its significant bitcoin holdings, dropped 5.4%, while crypto exchange Coinbase Global and blockchain operator Bitfarms were down 3.6% and 3.8%, respectively.

Although cryptocurrency remains a highly volatile sector, its mainstream appeal has grown, with support from Wall Street institutions and figures like Elon Musk, along with the approval of U.S. exchange-traded crypto funds. However, the debate’s outcome has cast uncertainty over the future regulatory environment, leading to a decline in crypto-related stocks.