Bitwise: Harris' statement caused BTC to rise by 5% What does it indicate

As I write this memo on Monday afternoon, the cryptocurrency market is rising sharply. Bitcoin is up more than 5% in the past 24 hours, and Ethereum is up more than 7%. Altcoins are not far behind.

This is the largest single-day gain in the cryptocurrency space in nearly two months. More interestingly, investors poured $555 million into Bitcoin ETFs on Monday, the largest single-day gain in four months.

The rally was driven in part by a plan unveiled Monday by Democratic presidential candidate Kamala Harris that, among other things, advocates for a smart regulatory framework for cryptocurrencies.

Reading U.S. media coverage of the proposal, you’d think Harris had embraced cryptocurrency with both arms.

“Kamala Harris emphasizes capital access and cryptocurrency to attract black men,” Bloomberg wrote.

But in reality, the statement didn't say much. Here's her full agenda:

Allow Black men who hold digital assets to benefit from financial innovation. More than 20% of Black Americans own or have owned cryptocurrency assets. Vice President Harris appreciates that new technologies can expand access to banking and financial services. She will ensure that owners and investors of digital assets benefit from a regulatory framework that protects Black men and others who participate in the market.

That’s it. That created a $5 billion market cap for Bitcoin.

I hate to be a dampener, but it was…nothing! No mention of ensuring fair access to banking services for crypto companies; no mention of changes in regulatory leadership; not even a mild comment about “embracing innovation in the digital asset space” or “the U.S. leading the way in blockchain.”

In fact, Harris’ words read more like a Rorschach test than policy. If you’re against crypto, you’ll see Harris pushing for tight regulation of crypto in the name of “protecting” investors; if you’re for crypto, you’ll see Harris pushing for regulatory clarity and a path forward for the industry.

I’m not close enough to the campaign to know exactly what she meant. I’ve seen people who claim to know the inside story argue both sides. From my perspective, you can only know one thing: The statement shows that Harris recognizes that cryptocurrency is important to an important demographic group, and she’s taking the time to point it out.

That’s good news. She knows crypto exists, it’s important, and it’s not going away. But it’s not the wholehearted embrace that crypto advocates had hoped for.

Here’s the thing, though: That one tiny bit of good news was enough to send Bitcoin up 5%. Enough to push more than $500 million into Bitcoin ETFs. Enough to make people start to wonder if the cryptocurrency will finally hit new all-time highs.

To me, that’s the most interesting thing today.

Regardless of what Harris actually said, the price action on October 15th tells me that there is a lot of capital on the sidelines waiting to enter the market once everything is normal.

In last week’s memo, I talked about what it would take to push cryptocurrencies to new all-time highs and push Bitcoin past $80,000. In terms of the election, I mentioned that either a Republican win or a divided government would be fine. My comments implied that we would have to wait until after the election before we could hit $80,000 again.

After today, I'm not so sure. Monday's rally tells me that if crypto starts to take off, people don't want to get left behind. There's a lot of dry powder on the sidelines. As soon as we get a whiff of clarity, I think we'll move up quickly.