First Trump-Harris debate: Crypto missing from discussion as markets react

In short:

• Trump and Harris debate without mentioning crypto or Bitcoin
• Bitcoin price fell by 1-3% after the debate
• Prediction markets show a shift in favor of Harris after the debate
• Trump has courted the crypto community, while Harris' stance remains unclear
• Polymarket placed $14 million in bets related to the debate

The first presidential debate between former President Donald Trump and Vice President Kamala Harris took place on September 10, 2024, and had a significant impact on financial markets, including cryptocurrencies.

Despite the growing importance of digital assets in the political and economic landscape, none of the candidates addressed cryptocurrencies or Bitcoin during the nearly two-hour event.

The debate focused on traditional issues such as foreign policy, immigration and abortion rights. The omission of the crypto discussion came as a surprise to many in the industry, especially given Trump's recent efforts to court the crypto community.

Since early 2024, Trump has positioned himself as a pro-crypto candidate, promising to pardon Silk Road creator Ross Ulbricht and pledging to fire SEC Chairman Gary Gensler on his first day in office if elected.

In contrast, Harris has not yet clearly expressed her stance on digital assets. Following President Biden's withdrawal from the race, the Harris team expressed a desire to “reshape” the Democratic Party's relationship with cryptocurrencies.

However, their personnel decisions indicate a possible continuation of the Biden administration's policies toward the industry.

Market reactions

The crypto market reacted to the outcome of the debate. In the hours following the event, Bitcoin recorded a decline of 1-3%.

The Bitcoin price fell from around $58,000 to $56,600 before recovering slightly to above $57,000. This decline coincided with shifts in prediction markets in Harris' favor.

Prediction markets played a major role in assessing public sentiment surrounding the debate. Polymarket, a crypto-based prediction platform, recorded a significant shift in odds.

Before the debate, Trump had a narrow lead at 53% to Harris' 46%. After the debate, both candidates were tied at 49% each, a seven-point swing. PredictIt, a non-crypto prediction market, showed an even more significant shift, with Harris' chances rising to 56% and Trump's falling to 47%.

The debate also sparked significant betting activity on Polymarket, with approximately $14 million wagered across 20 different markets related to the event.

That total far exceeded the $2.5 million wagered on the earlier Biden-Trump debate, with bettors speculating on various outcomes, including whether the candidates would shake hands and what specific phrases they would use during the debate.

In broader financial markets, the outcome of the debate appeared to trigger a risk-off mood. Asian markets and US equity futures saw a downturn, while the Japanese yen strengthened against the US dollar, hitting its highest level since January.

Trump-related political finance (PoliFi) tokens saw significant losses following the debate, with some falling over 20%. A Harris-related token, on the other hand, saw a modest gain, reflecting the market's perception of the outcome of the debate.