Senator Chuck Schumer’s “Dear Colleague” letter left cryptocurrency off the latest bipartisan agenda, despite his earlier promise to prioritize it this year.
Fox News journalist Eleanor Terrett pointed out that in his latest letter to Senate colleagues, Schumer listed several legislative priorities like rail safety, insulin prices, and artificial intelligence, but left crypto off the table.
🚨NEW: @SenSchumer sent a letter to his Senate colleagues where he mentioned priorities for passing bipartisan legislation in the remaining months of Congress. Cryptocurrency legislation was not mentioned, but artificial intelligence was.
This decision follows Schumer’s comments at the “Crypto4Harris” town hall, where he said that getting a bipartisan crypto regulation bill passed by year-end was within reach. Organized by Vice President Kamala Harris’s supporters, the event aimed to woo the crypto community ahead of the November elections.
During his speech, Schumer articulated that the United States cannot “sit on the sidelines” and risk “crypto going overseas,” adding:
“My goal is to get something passed out of the Senate and into law by the end of the year, and I believe we can make that happen. We should strike a balance for crypto between promoting innovation and providing common-sense guardrails.”
Chuck Schumer, Senate majority leader, speaking at Crypto4Harris virtual townhall
At the time, Florida Congressman Darren Soto also urged Harris to take decisive action on crypto policy.
The crypto deficient letter has drawn criticism from some members of the decentralized community, who have expressed frustration over what they perceive as a lack of genuine commitment to cryptocurrency issues from the Biden-Harris administration.
One user on X pointed out that the Vice President herself had not “said a word about” cryptocurrency, adding that the recent actions of her “colleagues” did not reflect a supportive attitude. Another user accused the Biden-Harris administration of using crypto-related events for political donations without any intention of meaningful engagement.
Even with crypto taking a backseat, Harris’s campaign is still accepting crypto donations via Coinbase, though there’s no mention of digital assets, cryptocurrency, or blockchain on her official website—keeping in line with the Biden administration’s generally cautious approach to the topic.
Harris has pulled in backing from some big-name pro-crypto Democrats, like billionaire Mark Cuban and Ripple co-founder Chris Larsen, both key players in the “Crypto4Harris” campaign. Still, she’s been struggling to keep the energy going among Polymarket users, where the odds seem to favor her Republican rival, Donald Trump.
Is Bitcoin on the verge of a major breakout, or will September’s economic indicators confirm the bearish sentiment that has kept the market in limbo for weeks?
Table of Contents
Bitcoin waiting for its next signal
For the past few weeks, the crypto market has been treading water, with prices stubbornly stuck in a tight range.
Bitcoin (BTC) has been hovering around the $60,000 mark, often dipping just below it and struggling to maintain any momentum above this level. As of Sep. 3, BTC is trading at approximately $57,500, a level it has repeatedly revisited over the past month.
BTC 6-month price chart | Source: TradingView
Similarly, Ethereum (ETH) has found a strong resistance at $2,500, barely budging from this range despite attempts to break through, trading at $2,450 levels as of this writing.
ETH 6-month price chart | Source: TradingView
This sideways price action has left many investors and traders on edge, especially as we head into September — a month packed with critical events that could strongly influence the market’s direction.
Among these are the U.S. Presidential Debate, the Consumer Price Index (CPI) data release, the Producer Price Index (PPI) data release, and the Federal Open Market Committee meeting.
The CPI and PPI data are particularly important because they will likely play a key role in the Federal Reserve’s upcoming interest rate decision. If inflationary pressures appear to be easing, the Fed might opt for a rate cut.
With so much on the horizon, let’s dive deeper to understand what to expect, the likely repercussions, and where things could go from here.
The inflation indicators steering the Fed’s next move
The U.S. CPI and PPI are two of the most critical economic indicators that could influence the Fed’s interest rate decision this month. Understanding these numbers is key to grasping how the market might react in the coming weeks.
The CPI data for August, set to be released on Sep. 11, is a crucial measure of inflation, tracking how prices for everyday goods and services change over time.
In July, CPI inflation was at 2.9%, slightly down from 3% in June, suggesting a gradual cooling of inflation. However, the Fed’s goal is to bring inflation down to 2%, so the August CPI figure will be closely watched.
If this number drops below 2.9%, it would signal that inflation is moving in the right direction, potentially easing the pressure on the Fed to maintain high-interest rates.
The following day, on Sep. 12, the PPI data will be released. The PPI measures the average change in selling prices received by domestic producers for their output, offering insight into the inflationary pressures within the supply chain.
In July, the PPI showed a more stark reduction than anticipated, with the year-on-year rate falling to 2.2%, well below the previous period’s 2.7%.
Core PPI, which excludes volatile food and energy prices, also saw a sharp decline, coming in at 2.4% year-on-year compared to the expected 2.7%.
The importance of these inflation measures cannot be understated, as they will heavily influence the Fed’s decision on interest rates during the upcoming FOMC meeting on Sep.18.
In the previous meeting, the Fed opted to keep rates steady, with the current target range set between 5.25% and 5.50%. However, Fed Chair Jerome Powell has hinted that the central bank is nearing the end of its rate-hiking cycle, provided inflation continues to ease.
According to the CME FedWatch Tool, the market is currently split, with 67% expecting a 25 basis point cut to a new target rate of 5.00-5.25%, and 33% anticipating a more substantial 50 basis point cut, bringing the rate down to 4.75-5.00%.
A 25 basis point cut would likely signal that the Fed is entering a typical easing cycle, which could provide stability to the market.
On the other hand, a more aggressive 50 basis point cut might trigger an immediate surge in Bitcoin prices as investors react to the potential for lower borrowing costs and a more accommodative monetary policy.
The second presidential debate: a turning point?
As the second U.S. Presidential Debate approaches on Sep. 10, the crypto market is bracing for potential shifts in sentiment and direction.
This debate will be particularly significant for the crypto community, as it brings together two candidates with starkly different histories and perspectives on the industry.
On one side, we have Republican nominee Donald Trump, who has taken a surprisingly pro-crypto stance during this campaign.
Just a few years ago, Trump referred to Bitcoin as a “scam” and voiced concerns about its threat to the U.S. dollar. However, in a dramatic reversal, he has now become a vocal advocate for the crypto industry.
In a keynote speech at the Bitcoin conference in Nashville, Trump promised to fire SEC Chair Gary Gensler—a figure widely criticized within the crypto community. He also unveiled his plan to create a national Bitcoin strategic reserve and pledged support for U.S. crypto miners.
These bold promises have positioned Trump as a candidate who could potentially bring about big changes in how the U.S. government interacts with the crypto industry.
On the other side, Vice President Kamala Harris has remained relatively quiet on the subject of crypto throughout her campaign, leading to much speculation about her stance.
However, recent comments from her senior campaign adviser, Brian Nelson, have shed some light on her views. Nelson indicated that Harris intends to support policies that allow emerging technologies, including crypto, to continue to grow. While the statement was vague, it marks the first official acknowledgment of the crypto industry from the Harris camp.
The timing of these statements is critical, especially as the Democratic Party’s latest document didn’t mention crypto at all—a fact that hasn’t gone unnoticed by the industry.
This omission, combined with Harris’ recent comments, has led to mixed interpretations. Some see it as a positive sign, suggesting a hands-off approach, while others view it as a continuation of the Biden administration’s policies, which have been seen as less favorable to the crypto industry.
Additionally, recent backlash over misinformation regarding Harris’ alleged support for taxing unrealized capital gains has further clouded perceptions. Although this rumor was unfounded, it raised concerns within the crypto community, further obscuring her position.
Meanwhile, the debate is set against a backdrop of increased regulatory scrutiny, with the SEC recently issuing a Wells Notice to NFT marketplace OpenSea, signaling potential legal action.
In this context, Trump’s recent moves, such as announcing a new set of digital trading cards — ironically listed on OpenSea — have further solidified his pro-crypto image.
The timing of this notice has fueled speculation that a Harris administration might maintain or even intensify regulatory pressure on the crypto industry.
For crypto investors, a strong performance from Trump is likely to be seen as a bullish signal, given his clear pro-crypto stance and promises of deregulation.
Conversely, a Harris victory in the debate might be more challenging to interpret. While her recent comments suggest a willingness to support the industry, the lack of specific policy details and the ongoing regulatory actions raise questions about what a Harris administration would mean for crypto.
Where could the crypto market head next?
As the crypto market stands at a critical juncture, many experts are weighing in on where things could go from here.
One such indicator comes from Santiment, a well-known crypto market analytics platform, which recently highlighted that Bitcoin is showing signs of life.
Santiment observed that as fear, uncertainty, and doubt (FUD) grow among traders, particularly with a noticeable increase in bearish sentiment, there’s a chance that this pessimism could actually set the stage for a rebound. In other words, when everyone starts feeling bearish, it might be the perfect time for the market to bounce back.
📊 Bitcoin has shown signs of life as the S&P 500 is paused for Labor Day. Signs of crypto growth without reliance on equities is a promising hint of the sector’s strength. Combined with growing trader bearishness and FUD, there are promising signs an upcoming rebound is near. pic.twitter.com/d3ykTTSHY0
Adding to this cautious optimism, crypto analyst Ali Charts pointed out that top Bitcoin traders on Binance are leaning slightly bullish, with over 51% holding long positions on BTC.
This tilt towards optimism, even if slight, suggests that traders are not entirely convinced that the recent market lull will lead to a prolonged downturn. It reflects a belief that the worst may be over and that Bitcoin could be poised for a recovery.
However, the broader economic backdrop remains a concern. The Kobeissi Letter recently highlighted a worrying trend in U.S. employment data.
Government hiring is inflating jobs numbers.
Private sector jobs growth as % of total payroll growth fell to 38% in July, the lowest since the 2020 pandemic.
Historically, every time the private payroll growth share fell below 40%, the US economy was in a recession.
Government hiring is inflating job numbers, while private sector job growth as a percentage of total payroll growth has dropped to its lowest level since the 2020 pandemic.
Historically, when private payroll growth falls below 40%, the U.S. economy has often been on the brink of a recession. This suggests that while the government is adding jobs at a record pace, the private sector is struggling, which could have negative implications for the economy — and, by extension, the crypto market.
Therefore, the upcoming CPI and PPI data will be crucial in shaping the Fed’s decision on interest rates during the FOMC meeting. If inflation continues to ease, the Fed may cut rates, boosting the crypto market.
Whether we see a bullish breakout or increased volatility will depend on how these political, economic, and market factors play out in the coming weeks. The decisions made and the data revealed this month will be critical in setting the course for where crypto is headed next.
Coinbase, Uniswap, Robinhood, Kraken, and Consensys are the names the digital asset industry has grown used to watching receive the dreaded Wells Notices from the United States Securities and Exchange Commission. These companies are exchanges offering a wide range of tokens on their platforms, many of which are clearly investment vehicles with the promise of future profits thanks to the work of centralized teams. It would make sense for some of the offerings on these platforms to fall under the category of security.
But, last week, a new and unexpected name joined the list: OpenSea, the largest online NFT marketplace. And now hundreds of thousands of online artists feel as if they are under attack. But it is likely the true artists don’t need to worry. An NFT project for the sake of art is likely not the type of project the SEC has on its radar.
Most NFTs are not securities
The move by the SEC came as a major surprise, as most NFTs are clearly not securities—they’re just art people buy and sell. And there is a long history of people—indeed, investors—buying art that the SEC does not regulate as a security. And so, the precedent for going after OpenSea is thin.
Heretofore, NFTs have generally been viewed as a consumer product, not a financial product, stripping the SEC of any regulatory authority. Sure, there are some exceptions—such as fractionalized ownership in ventures—though OpenSea did try and keep projects promising returns off the platform.
Despite the facts, the SEC is considering a case against the NFT marketplace.
The facts are on the side of OpenSea and NFT artists
The facts of any case against OpenSea are that the platform generally allows users to buy and sell art, not securities.
There would be no precedent for the SEC to go after NFT artists. In fact, any and all of the facts speak against categorizing art in any shape or form as a security. It doesn’t make sense. Everyone knows individuals and entities buy and sell art that is not regulated as a security. Online NFTs, in most cases, follow this model.
Therefore, as far as most of the projects on OpenSea go, the SEC won’t have a leg upon which to stand when it comes to any potential legislation.
Instead, the SEC’s focus will be on NFTs promoted as investments and also offer some future profits due to the efforts of an NFT collection’s founders rather than pure artists just trying to sell their art online in a new and exciting way.
SEC precedent vs. NFTs similar to token precedents
In past SEC cases against the NFT industry, the SEC has established a clear pattern. How the NFTs had been promoted was at the heart of the case, as well as the promise of future profits thanks to the work of the NFT collection’s team.
Just like during the ICO days, when many projects made bold promises without working on tech, many non-NFT projects functioned as vaporware or vehicles by which founders attempted to raise investments. Instead of innovation, many projects were based on hype and hype alone, especially around the potential resale value of the project, which the SEC sees as a red flag.
NFT projects with royalty schemes, revenue distribution, and similar are the ones the SEC is likely after. For that reason, most NFT artists can breathe a sigh of relief, leave the fight to OpenSea lawyers, and get back to creating.
Those who are attempting more complicated NFT structures must now play a waiting game. Indeed, if there is to be a benefit of the SEC’s Wells Notice to OpenSea, it will long at least be for the possibility of regulatory clarity in the realm of NFTs.
Whoever wins the upcoming U.S. election and becomes president must work towards regulatory clarity for the crypto sector, Lucy Gazmararian, founder and managing director at Token Bay Capital, says.
Gazmararian shared this perspective during an interview with CNBC on Sept. 2. She noted that the bull market spike seen earlier in the year happened amid the spot Bitcoin (BTC) exchange traded fund mania.
However, as well as ETFs, there’s been this rise of crypto into a topic in politics amid the upcoming election.
Gazmararian on crypto clarity in the U.S.
While the crypto market’s upward trajectory has tapered off slightly, the Token Bay Capital founder is bullish on the industry. Her projection is that the market could benefit from key upside catalysts in the fourth quarter of the year and that the BTC price will be higher than the current levels just above $58,000.
With the U.S. election just over two months away, the discussion on what the result could mean for crypto is gaining momentum fast.
According to Gazmararian, whoever wins has to aim at regulatory clarity for crypto. The new president will need to set the ball rolling in terms of pushing for a “sensible crypto framework,” the Token Bay Capital founder added.
She says the U.S. needs that clarity to reverse the negatives seen in the past four years, particularly with the European Union’s MiCA regulation in place. She added the U.S. is “lagging behind” in regulatory clarity and it is vital for whoever wins the election to be “supportive of the industry.”
Trump or Harris?
To many observers, the crackdown by the U.S. Securities and Exchange Commission is seeing America lag behind other countries and jurisdictions. The enforcement by regulation has only worked against the industry.
It’s why the discourse on whether a Donald Trump win could be good for the space.
Despite the recent crypto roundtable meetings, calls by crypto supporters and the Kamala Harris campaign’s message, the lack of the VP’s voice in this has many crypto proponents concerned. Recent SEC actions against OpenSea and other developments also haven’t helped either.
Meanwhile, former President Donald Trump has attracted a lot of positive commentary from crypto industry leaders for his crypto-friendly stance. Trump’s appearance at Bitcoin 2024 and the pledge to end the current administration’s “war on crypto” also stands him well within the industry. Trump’s vice president pick, JD Vance is also pro-crypto.
But Gazmararian thinks all that matters is for the new government to support a framework that brings much-needed clarity and support for the sector.
In June, Security.org published findings that raised quite a few eyebrows around the crypto world. Their new data found that 40% of American adults now own crypto, up significantly from last year. Even more, it seemed like a sustainable increase. Crypto ownership among women has spiked, and a huge chunk (21%) of non-owners are more likely to invest after the approved US Bitcoin (BTC) exchange-traded fund.
There are some caveats to remember here. This data is based on two relatively small surveys (1,001 and 504 people, respectively) and may misrepresent the entire US population since they were done online. The Federal Reserve listed just seven percent of US adults as crypto investors in 2023, with a much bigger sample size. However, their data, too, might be misrepresentative, given that the respondents were selected from only those who agreed to participate in Ipsos’ KnowledgePanel.
Whether or not the Security.org number is realistic, it has got me thinking. What if 40% of the world’s adult population (about 5.75 billion people) owned crypto, not just the US? This idea has been rolling around in my head for a couple of months now. It both baffles and excites me. Here’s what I’ve come up with.
There would be four major categories of change:
● Individual economics.
● Financial systems.
● Technological and social patterns.
● Environmental policy.
Come along with me for this thought experiment. One that might not be all that far-fetched is the way things are going.
Individual economics
One of the most touted benefits of cryptocurrency is its potential to provide financial services to the unbanked or underbanked.
Take the Philippines for example. Despite 66% of their population being unbanked, crypto usage is rising. Over 13% (or nearly 15.8 million people) own crypto, and the government is rapidly pushing to release a central bank digital currency to keep up with the demand.
Over $33 billion in cash remittance is sent home from overseas Filipino workers, another perfect use case for crypto. Traditional banking systems, often inaccessible or inconvenient for citizens in developing regions, will find a formidable competitor in blockchain-based financial services if adoption continues to increase.
Crypto could serve as a financial equalizer, bridging gaps that have long excluded vast populations from economic participation.
Volatility and risk
Cryptocurrencies are infamous for their volatility, which might pose a significant risk for the underbanked. But if as many as 40% of the world were invested, that volatility would likely decrease. As more people participate in the market, the liquidity of crypto assets would increase, making it harder for any single transaction—even from whales—to dramatically affect prices.
A more widely held and traded asset tends to have smoother price movements, as the effects of large buys or sells are diluted. As the adoption rate increases, we can anticipate that cryptocurrencies might stabilize (to some extent), making their value more predictable over time.
Investment patterns
With nearly half the adult population holding crypto, traditional investment paradigms would shift. A significant portion of personal savings could be directed toward digital assets rather than conventional investments like stocks or mutual funds. Diversification would have a whole new meaning; traditional portfolios would include a mix of equities, bonds, and digital assets.
Financial systems
The massive shift in investment patterns would inevitably disrupt traditional financial markets. With so many people not invested in digital assets, a considerable portion of capital that might have been funneled into traditional stocks and bonds would instead flow into the crypt ecosystem.
This diversion could result in liquidity challenges for conventional markets, increased volatility, and shifts in valuations as investor attention is divided. IPOs would likely be structured differently, with some companies offering ICOs either as a replacement or in support of their public offerings.
Crypto integration
However, not all the effects will be negative. The increased demand for crypto-based investment opportunities would lead to greater integration with existing structures. We’ve already seen the beginning of this with the approval of several Bitcoin ETFs, which provide a regulated, familiar pathway for traditional investors to gain crypto exposure. These financial products would become normal—even mundane—as mainstream adoption rises.
Regulation and policy changes
However, for mainstream adoption to be possible, regulatory adjustments would be necessary. We’ve already seen some notable developments in this area. For instance, Senate majority leader Chuck Schumer recently pledged to push crypto regulation through before the end of the year. Legislation ensuring investor protection, curbing market manipulation, and fostering innovation would likely emerge all over the world. Policymakers would be compelled to work with the private sector to develop frameworks that both allow crypto to flourish and ensure it doesn’t undermine overall financial stability.
Digital payment expansion
Some of that legislation would have to address the explosion of digital payment options. Recently, a bipartisan bill was introduced by Senators Tedd Budd (R-NC), Kyrsten Sinema (I-AZ), Cynthia Lummis (R-WY), and Kirsten Gillibrand (D-NY) to remove the capital gains tax on small crypto payments. If successful, this type of legislation would set a precedent, encouraging more countries to follow suit and integrate crypto into their everyday economies. Imagine paying for your morning coffee or splitting a dinner bill without worrying about the tax implications.
Technological and social patterns
As crypto usage increases, blockchain innovation also increases, with new use cases being created every day. From supply chain management to healthcare, distributed ledgers can help increase transparency, security, and traceability.
Digital identification and trust
Governments all over the world are exploring digital identification, though too few are including blockchain technology in their initiatives. If crypto continues to thrive, blockchain-based citizen authentication will be a natural byproduct. Digital IDs on the blockchain can significantly reduce fraud, streamline transactions, and enable secure, authenticated access. Your ID would be universally recognized, securely stored, and irrefutable with the help of identification layers from companies like Concordium.
Social implications
For it to rise to 40% or more, trust must be placed in the technology itself rather than in human institutions. For many, that shift requires a leap of faith. Peer-to-peer transactions could become the norm, reducing reliance on traditional banking. The younger, tech-savvy generation would lead this transition, driving innovation and new business models. But it could also exacerbate digital divides. Those without access to the internet or technological literacy may find themselves further marginalized. Policy and educational programs would need to be created to promote inclusive access to new financial systems.
Environmental policy
One of the most pressing issues surrounding the widespread use of crypto is the environmental impact. Major tokens like Bitcoin (BTC) operate on a proof-of-work model, which requires extensive computational resources and, consequently, a large amount of energy. The Environmental Working Group has been vocal about the need for change through their “Change the Code, not the Climate” campaign, advocating for Bitcoin to move away from PoW to less energy-intensive models like proof-of-stake.
However, the environmental story isn’t just doom and gloom. Crypto and blockchain tech also offer promising avenues for advancing green energy initiatives. Peer-to-peer energy trading, where individuals can buy and sell their renewable energy directly to and from their neighbors, could reduce our reliance on traditional sources.
Final thoughts
There’s still a lot of change to come if we want widespread cryptocurrency adoption. None of it is possible without a thoughtful, well-rounded policy that supports innovative technology.
I’m hopeful that the recent developments in the US and ongoing public pressure in the EU and the UK will force lawmakers to realize that the public wants—and deserves—robust, supportive crypto frameworks instead of endless restrictions.
The number of crypto millionaires nearly doubled in 2024, reaching 172,300 as spot Bitcoin ETFs and other crypto assets surged.
The global population of crypto millionaires has surged 95% over the past year, driven by the rise of spot Bitcoin exchange-traded funds and other cryptocurrencies, according to a new research report by New World Wealth and Henley & Partners.
The report reveals that 172,300 individuals worldwide now hold more than $1 million in crypto, nearly doubling from 88,200 in 2023. Data shows that during the same period, the number of Bitcoin (BTC) millionaires more than doubled to 85,400.
Crypto wealth has also expanded significantly, with 325 individuals now classified as crypto centimillionaires —those holding $100 million or more in crypto — and 28 crypto billionaires. The report attributes such a rapid surge to the growth of spot Bitcoin ETFs, which have amassed over $50 billion in assets since their January launch, igniting a surge in institutional participation.
Commenting on the data in an interview for CNBC, New World Wealth’s head of research Andrew Amoils pointed out that of the six new crypto billionaires created in 2023, five owe their wealth to Bitcoin, underscoring its “dominant position when it comes to attracting long-term investors who buy large holdings.”
Investors seeking crypto friendly countries
Crypto is reshaping not just wealth but also the demographics of where the rich live and work. Analysts at Henley & Partners note that many newly wealthy crypto individuals are seeking to relocate to tax-friendly and crypto-friendly jurisdictions, saying they have seen a “significant uptick in crypto-wealthy clients seeking alternative residence and citizenship options.
To rank countries based on their tax and regulatory environments, Henley & Partners developed an index, placing Singapore in the top spot due to its “supportive banking system, significant investment, comprehensive regulations such as the Payment Services Act, regulatory sandboxes, and alignment with global standards.”
Presidential candidate Kamala Harris’ team finally broke their silence on crypto. But is the cautious approach too little, too late?
For months, Kamala Harris’ campaign has been notably quiet on the subject of crypto, leaving many to speculate about the Democratic candidate’s stance on the industry. However, the wait appears to be over.
According to a Bloomberg report this week, during a roundtable event at the Democratic National Convention in Chicago on Wednesday, Harris’ senior campaign adviser, Brian Nelson, provided some insight into her potential policies.
Nelson stated that Vice President Harris is “going to support policies that ensure that emerging technologies and that sort of industry can continue to grow.” Though the statement is vague and refers to “emerging technologies” more broadly, it represents the first public, official stance from the Harris team on the crypto industry.
Nelson also highlighted the need for clear regulations, referencing the fallout from events like the collapse of FTX in November 2022.
The Harris campaign’s so far cautious expression of support for the industry contrasts sharply with rhetoric and promises from Republican nominee Donald Trump, who has been outspoken in his endorsement of crypto during this campaign — though just a few years ago Trump called Bitcoin a “scam” and voiced concerns about it as a threat to the U.S. dollar.
In a historic keynote speech at the Bitcoin conference in Nashville,Trump vowed to fire highly unpopular (in the crypto industry) Securities and Exchange Commission Chair Gary Gensler — a statement that was met with cheers from the audience. In the same speech, he also revealed his intention to create a national Bitcoin strategic reserve in the United States, if elected. In another instance, he pledged support for U.S. crypto miners.
Now with both candidates outlining their views on the industry, it’s evident that the future of crypto in the U.S. could take very different paths depending on the election outcome, making it a slowly emerging bipartisan issue.
Let’s dive deeper into what this could mean for the crypto industry and how Harris’ emerging position might shape the space moving forward.
Uphill battle for Harris
Harris faces a challenging environment for winning over crypto-focused voters, who are already disillusioned by the stringent policies under the current administration, especially what is perceived as the overly authoritarian stance of the SEC under Gensler.
The Harris team’s cautious but positive first public statement this week could be a turning point. But other recent events from the Harris campaign continue to overshadow the sentiment in the crypto community.
Just before the 2024 DNC kicked off in Chicago, and a few day’s before Nelson’s statement, the Democratic Party released its latest platform, a 92-page document very clearly written while President Biden was still running for a second term. The program didn’t include a single mention of crypto — a fact that was mostly criticized in the industry. Though some analysts saw the absence as a potentially positive development, most in the community interpreted it as a continuation of the approach to crypto under Biden.
Also this week, Harris received backlash from the crypto community in response to widely circulating misinformation that the VP had endorsed an earlier proposal from President Biden to tax unrealized capital gains.
The rumor gained traction on X and had many disgruntled crypto traders mistakenly believing that Harris supported a tax that could force them to liquidate significant portions of their portfolios. In reality, the potential tax policy — introduced by the Biden administration in March as a proposal for 2025 policy — would be unlikely to affect most U.S. crypto holders, as it would only apply to Americans with more than $100 million in wealth.
The week before, Harris faced criticism after failing to appear at a virtual town hall organized by the grassroots industry campaign Crypto4Harris. The event was widely seen as a missed opportunity to build trust and engage directly with the crypto community. The absence of Harris herself was particularly noticeable, leaving many viewers disappointed.
High-profile endorsements from figures like Mark Cuban and Senate Majority Leader Chuck Schumer, along with pre-recorded messages from Senator Gillibrand and others, failed to engage the audience, leaving them with more questions than answers.
In light of these recent incidents, the Harris team’s public statement on Wednesday in support of the crypto industry could be seen as a positive first step in addressing these concerns. But words alone won’t be enough, as evidenced by the public backlash.
Public backlash and mistrust
Despite the Harris campaign’s recent statement, many in the crypto community remain unconvinced and wary of placing their trust in her as a genuine advocate for the industry.
Charles Hoskinson, co-founder of Cardano (ADA), voiced sentiment that resonated with many: talk is cheap. He questioned the absence of specific policies or proposals and demanded “specific, tangible actions” to support the crypto industry.
No specific policy or proposal. Just talk. Will gary be fired? What legislation do you support? What executive actions will be issued? Why haven’t you changed the policy RIGHT NOW since you’re president.
Hoskinson’s skepticism was echoed by Eleanor Terrett, a journalist at Fox Business, who highlighted that Harris’ senior campaign adviser, Nelson, didn’t even mention “the words crypto or digital assets” in his statement.
🚨NEW: Harris campaign adviser Brian Nelson said @KamalaHarris will support policies that ensure emerging technologies can continue to grow.
I’ll probably get yelled at for pointing out that he didn’t actually say the words crypto or digital assets, just “that sort of industry.” https://t.co/4gvC3gktJl
On the other hand, there are voices like Adam Cochran, founder of Cinneamhain Ventures and an active industry commentator on X, who sees the statement as a positive first step, all things considered.
This won’t be enough for some of you and that’s fine.
We want to see the policies and we want to see the actions.
BUT, this is the first official statement from the Harris campaign about crypto in *any* capacity and it *is* a positive one.
— Adam Cochran (adamscochran.eth) (@adamscochran) August 21, 2024
Cochran acknowledged the frustration within the community at the lack of concrete actions or policy, but urged people to recognize the import of the fact that this is the first time Harris’ campaign has addressed crypto officially in any form. However, even his attempt to inject optimism was met with backlash.
Critics were quick to dismiss Cochran’s optimism, pointing out that the past four years have shown little to no support for the crypto industry from Harris. They argue that her actions — or lack thereof — speak louder than any vague statements from her campaign team.
Adam no disrespect but the past four years should be proof enough as to how the next four years will play out under Harris. They have shown us by their actions time and time again.🤷🏻♂️
The demand for specific, actionable policies remains strong, and until those are presented, many in the crypto industry will continue to view the Democratic candidates statements with skepticism. Harris has made her move, but it will take much more to convince a community that has long felt neglected.
What do experts think?
To gain a deeper understanding of the potential impact of Harris’ emerging stance on crypto, crypto.news spoke with two experts on the subject.
Nick Anthony, a policy analyst from the Cato Institute, offered a candid perspective on Harris’ position. Anthony highlighted the challenges Harris faces, telling crypto.news that while some Democrats have succeeded in maintaining a bipartisan approach to crypto policy, Harris still has much to prove:
“Individual Democrats have done well to try to keep crypto policy bipartisan. However, if Vice President Harris is going to step out of the shadow of Operation Choke Point 2.0 and Senator Warren’s anti-crypto army, she needs to take an official policy stance herself. Until then, there’s little reason to think the Harris-Walz administration will be any different from the Biden-Harris administration.”
The term “Operation Choke Point 2.0” refers to the perceived recent targeted crackdown on crypto businesses in the U.S., under the guise of general regulatory enforcement — a sentiment believed by many in the industry, who argue that such measures not only stifle innovation, but represent a misuse and manipulation of the law.
Adding to this discussion, Nitin Gaur, co-founder and CTO of Stealth Startup, voiced his concerns over the current administration’s approach to crypto in statement to crypto.news:
“The unjust war on crypto by the incumbent government apparatus and Operation Choke Point 2.0 is a shotgun approach to stymie the growth of an industry. It is not about crypto as a currency, but a new technology that aims to solve the trust system and coordination technology to move the transaction speed forward.”
He stressed the need for meaningful policies that should consider the intersections of technology, including AI, blockchain, and quantum computing, which have the potential to transform not just the financial sector but other fields as well.
Gaur warned that “the current administration has ignored all adjacencies and focused on the ‘currency’ part of the equation — it needs to take time and craft meaningful policies.”
Both experts agree that the path forward requires more than just broad statements. As it stands, the crypto world remains cautious, waiting to see whether Harris can truly differentiate herself and her policies from those of the current administration.
Recent rumors swirling on X wrongly accused presidential candidate Kamala Harris’ of endorsing President Biden’s 2025 proposal for a 25% tax that includes unrealized capital gains. What’s the truth behind the headlines and what caused the confusion?
Earlier this week, thousands of crypto investors found themselves caught up in a whirlwind of misinformation, with many prominent accounts reporting that U.S. presidential candidate Kamala Harris had endorsed a new tax on unrealized gains, originally proposed by President Joe Biden for 2025.
Social media, especially X, buzzed with outrage as people retweeted and reacted to evidently misinterpreted headlines, convinced that Harris wanted to tax unrealized capital gains at 25% next year. The mass disapproval expressed on X seemed to imply that members of the crypto community thought this proposed tax would be all U.S. investors, regardless of their net worth.
Unrealized gains refer to the amount an asset has gained in value (let’s say in USD) before you sell the asset and take the profit. So if you bought Bitcoin at $50,000 and now you’re seeing your BTC has grown more than 22% at today’s prices, you don’t actually realize those gains until you sell your BTC.
BREAKING: Kamala Harris endorses raising long-term capital gains tax to 44.6%, also backing a 25% tax on unrealized capital gains of wealthy individuals.
The outcry was evidently fueled by a misunderstanding after Harris’ campaign team last week released her economic plan, as well as stated on Monday that, if elected, she would raise the corporate tax rate — a proposal previously put forward by the Biden administration.
Many were quick to assume that Harris’ team had officially endorsed the current administration’s entire tax policy proposal for 2025, which mentions unrealized gains as part of a new minimum tax on the ultra wealthy.
But as happens with rapidly spreading rumors, this just wasn’t true.
As pointed out by crypto investor, professor and well-known analyst on X, Harris’ team did not endorse, comment on or otherwise reference the 256-page document entitled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” which was published in March of this year.
So you fuckwits did it again and ran up the rumor mill.
Harris did not endorse an “unrealized gain” tax.
-Harris’ campaign endorsed the *increases* in tax rate on corporate tax and personal tax rate over $400k in this plan.
— Adam Cochran (adamscochran.eth) (@adamscochran) August 20, 2024
However, someone on X had read at least part of the extensive proposal from Biden-Harris administration. Included in the document is a new minimum tax of 25% on total income (including unrealized capital gains) for people with more than $100 million in wealth:
“The proposal would impose a minimum tax of 25 percent on total income, generally inclusive of unrealized capital gains, for all taxpayers with wealth (that is, the difference obtained by subtracting liabilities from assets) greater than $100 million.”
Biden’s tax proposal for 2025
Taken out of context — both that this is a proposal from the current administration and it is only applicable to a very limited group of highly wealthy individuals, and also that Harris and her team didn’t even endorse this proposal — the rumors took on a life of their own and spread across the crypto community.
Let’s break down what we do know about Harris’ proposed tax policy, how it might impact the crypto market, and what experts have to say about it.
Decoding Harris’ taxation proposal and its impact on crypto
Last week, Harris did in fact reveal part of her proposed economic agenda, which included a series of tax proposals. While the details are still emerging, let’s break down what we know so far.
First, as noted above, Harris has expressed support for raising the corporate income tax rate from 21% to 28%. This move is expected to generate significant revenue for the federal government, potentially increasing tax receipts by up to $1.4 trillion over the next decade.
This proposed increase in the corporate tax rate could impact crypto companies, especially larger entities like exchanges or mining operations.
Higher taxes could lead to reduced investment in new projects or increased fees for users as companies seek to cover their rising tax obligations.
Another key aspect of Harris’s economic agenda is focused on making housing more affordable. She’s proposing several tax incentives to encourage the construction of new homes, particularly for first-time buyers and renters.
For instance, she plans to offer tax breaks to companies that build affordable housing and provide up to $25,000 in down-payment support for new homeowners to address the rising costs of housing in the U.S.
While the question of tokenized real estate could come into play here, it’s not clear that the housing-related policy proposals affect crypto holders in any particular way.
What is Biden’s proposal for capital gains tax?
Again, the confusion surrounding Harris’ rumored (but actually fake news) endorsement of Biden’s proposed tax on unrealized capital gains stems from a couple of misunderstandings. But even though Harris did not endorse the plan, it’s not unreasonable to suggest she might do so in the future. So let’s take a look at what Biden’s plan for 2025 tax policy actually entails.
In general, Biden’s proposal includes several tax policy changes aimed at increasing the tax burden on the wealthiest Americans. The proposal argues that current long-term capital gains tax policy in particular disproportionally benefits the very wealthy:
“Preferential tax rates on long-term capital gains and qualified dividends disproportionately benefit high-income taxpayers and provide many high-income taxpayers with a lower tax rate than many low- and middle-income taxpayers.”
The proposal seeks to close the so-called “loophole” in the current system that let’s wealthier individuals pass on the appreciated value of their assets to their beneficiaries without ever paying income tax on those gains.
Currently, long-term capital gains — profits from the sale of assets held for more than a year — are taxed at a maximum rate of 20%, or 23.8% when including the 3.8% net investment income tax, with a few exceptions.
For high-income earners with taxable income exceeding $1 million, Biden’s proposal would tax long-term capital gains at ordinary income tax rates, which could reach as high as 37%, or 40.8% with the NIIT.
However, this is not the end of the story. Another proposal within the budget seeks to increase the NIIT by 1.2% points for those earning over $400,000, bringing the total NIIT to 5%.
This combination would effectively push the maximum tax rate on long-term capital gains and qualified dividends to 44.6% for the wealthy.
To break it down: this 44.6% rate is the result of combining the proposed 39.6% top ordinary income tax rate with the increased 5% NIIT (which includes the additional 1.2% hike for high earners).
What about unrealized gains?
The highly controversial phrase “unrealized capital games” is included in Biden’s 2025 proposal as part of a minimum income tax (25%) for the wealthiest Americans who have wealth (meaning assets minus liabilities) of over $100 million. This minimum tax for the”extremely wealthy”, as previously noted, would include unrealized capital gains and reportedly represents an effort to address the loophole in the current system.
But how many Americans would even be affected by such a change in tax policy? The answer is less than 10,000. According to a 2024 U.S. wealth report published in March, there are currently 9,850 individuals in the U.S. who qualify as “centi-millionaires” — aka have wealth of $100 million or more.
That means, to clarify, that the conversation that took X by storm earlier this week was actually about a tax proposal that would affect just 0.0028% of the U.S. population — and that the current Democratic candidate for president hasn’t even endorsed.
For most crypto traders and investors, of course, the widely discussed and criticized tax proposal would most likely be irrelevant.
Public reaction and controversy
The recent debate around Vice President Harris and her (rumored) stance on taxing unrealized capital gains ignited a firestorm on social media.
Reports suggest that Harris is aligned with the Biden administrations 2025 tax proposals, but Harris and her team have yet to endorse all of the proposed changes officially.
Notably, a January 2024 analysis by Americans for Tax Fairness revealed that U.S. billionaires and centi-millionaires held a staggering $8.5 trillion in unrealized capital gains in 2022, which could be a potential goldmine for federal revenue, but, clearly, has also sparked intense debate.
Certified financial planner and CNBC advisor council member Douglas A. Boneparth went for a direct attack, calling the idea of taxing unrealized gains “dumb.”
Just a friendly reminder that taxing unrealized capital gains is dumb.
Aaron Levie, CEO of Box, shares the same belief, stating that “unrealized gains are simply a field in a database and not useful until converted into something of value.”
Any proposed policy to tax unrealized capital gains is bad policy. Unrealized gains are simply a field in a database and not useful until converted into something of value.
Interestingly, according to Polymarket, while Harris was once leading the race with strong odds of winning the election, her chances have recently dipped to 46%. Meanwhile, Trump, who was slightly behind, has retaken the front seat with odds now at 53%.
2024 U.S. presidential election winner bets on Polymarket | Source: Polymarket
In the end, whether you view the idea as a necessary step toward equity or as simply “a field in a database,” one thing’s for sure — when it comes to tax policy, the devil is in the details. And if social media has taught us anything, it’s that even the smallest detail can cause a big stir.
Crypto wasn’t mentioned once as the Democrats set out their priorities for the next four years, but some argue this indicates that Biden’s aggressive crackdown will end.
The 2024 Democratic National Convention kicked off in Chicago yesterday and will see Kamala Harris formally confirmed as the party’s presidential nominee.
In recent days, there have been murmurings that her campaign was gearing up to adopt a more open stance toward crypto regulation, in contrast to Joe Biden’s aggressive clampdown.
Groups such as Crypto4Harris have popped up, with senior Democrats and entrepreneurs arguing that Donald Trump doesn’t have a monopoly on proposing literate policies.
During a virtual town hall, Senate Majority Leader Chuck Schumer even declared that crypto legislation can be passed this year — ending years of paralysis in Congress.
BREAKING: Democrat Senate Leader Chuck Schumer just said to @Crypto4Harris that he plans to support crypto innovation through passing a bipartisan bill in the Senate this this year. pic.twitter.com/qR6XJpOtvw
So as the DNC kicked off, with the likes of Joe Biden and Hillary Clinton gracing the podium, there was some optimism that digital assets might get a fleeting mention.
All was going well until the Democrats set out their priorities for the next four years in an official 92-page document, which failed to mention crypto at all.
This will be a disappointment to ardent believers who firmly believe in this industry’s potential, but don’t want Trump to secure a second term in the Oval Office.
There was further panic when rumors started to circulate that Gary Gensler, who has been accused of “regulation by enforcement” during a controversial stint as SEC chair, could be tapped as the next treasury secretary if Harris wins in the fall.
Custodia Bank CEO and Bitcoin supporter Caitlin Long poured cold water on those reports by declaring that this speculation is false — and given how this would have swayed the decision of anyone voting based on crypto alone, that’s probably a good thing.
Given crypto’s omission from the agenda, it would be easy to assume that American investors should just expect more of the same: gray areas, inconsistency, and a flight of top talent to rival economies that are more open-minded to digital assets.
But weirdly, many BTC-holding Democrats have been seeking to argue that this is a good thing — and could actually herald a reset when it comes to how crypto is treated by legislators.
2024 Dem Platform released. Zero mentions of crypto.
Some text from before Biden dropped (see 19 mentions of “2nd Biden term”)– but if Harris serious about a reset, missed opportunity. Otherwise next 4 years just a continuation of Biden admin policies.https://t.co/NfWSM4OQ11pic.twitter.com/84oln1SFcK
Crypto analyst Adam Cochran believes that the absence of digital assets from the party platform may indicate more of a hands-off approach — and an end to “anti-crypto rhetoric.”
Having been tagged in this by plenty of idiots, let me point out:
-Not mentioning crypto *IS* the pivot.
For years we’ve had anti-crypto rhetoric, Warren shouting for an “anti-crypto army” and Treasury, OFAC and the Fed going chokepoint claiming crypto is about money… https://t.co/y8hI2EEcKJ
— Adam Cochran (adamscochran.eth) (@adamscochran) August 19, 2024
He pointed to how some Democrats, including Senator Elizabeth Warren, had been lobbying for a much more aggressive stance against crypto, but there are growing signs that the party is now heading in another direction.
Cochran said that there would have been cause for alarm if the party platform had pushed for the SEC to have greater powers, an outright ban on crypto, or a “formal chokepoint strategy” designed to make trading impractical for consumers and businesses alike. He wrote on X:
“Crypto doesn’t need government handouts to succeed. It needs a non-hostile environment. Proactive and supportive policy is great, but it also takes time to develop.”
Not everyone agrees with his analysis here — with some arguing that complete silence on this issue doesn’t mean that things will change for the better.
The Bitcoin Voter Project, which has been established by a number of prominent U.S. mining firms, went on to claim that “the Democrats are missing a huge opportunity to energize and activate millions of left-leaning Bitcoiners.”
Sure, crypto was worth a mention at some point in a 92-page party platform. But you could argue that Harris may have bigger fish to fry. Global wars are raging and fears are growing around climate change — with economic uncertainty and housing shortages a major concern. Given that the total crypto market cap stands at $2.2 trillion, which is less than 10% of America’s annual GDP, does the industry have an overinflated view of how much attention it deserves?
What’s more, it’ll be interesting to see how much crypto ends up swaying Americans in the ballot box come November. From education to the economy, healthcare to gun control, immigration to abortion, there are many challenges facing the country — and it seems naive to think that many Bitcoiners will cast votes based on this issue alone.
Between now and Thursday, it seems there will be little for the crypto industry to look forward to on stage in Chicago. But given how unpredictable and dramatic the race has already been, a lot can change over the next 76 days.
