Growing excitement over the Kamala Harris presidential campaign may be contributing to Bitcoin’s recent price decline, analysts at Bernstein wrote in a report published Monday.

Odds that Harris will win the election have shot up in recent polls, as well as on crypto prediction markets platform Polymarket since President Joe Biden backed out of the race for the Democratic candidacy in favor of his vice president.

This is a bearish sign, according to analysts at the investment firm, due to how Democrats have broadly approached crypto and a lack of clarity on Harris’ stance towards digital asset regulation.

Polymarket is a popular betting platform that allows people to put money on everything from politics and sports to a celebrity’s next gaffe. The platform runs on Ethereum scaling network Polygon, and it has surged in popularity this year amid the U.S. election cycle—and even more so as the crypto space has become a hotter topic among politicians.

Republican presidential candidate Donald Trump has come out as pro-crypto, and therefore become the favorite for some in the space. A Harris win in November could hurt crypto prices by portending a potentially negative future for digital assets in the U.S., the report authored by Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia noted.

“Our interpretation of current market sentiment is that a Trump win is bullish and Harris win is bearish (at least in terms of the immediate market reaction),” Monday’s report read. 

“The Trump side has been vocal on its crypto policy and has actively reached out to the crypto companies, Bitcoin miners, and the broader community,” it added. “The Trump-led Republican side has made a strong pitch to crypto voters by promising favorable policy for Bitcoin and crypto innovation, even teasing a potential national Bitcoin reserve.”

Ex-President Trump used to criticize cryptocurrencies, saying he was “not a fan” and calling Bitcoin a “scam.” But this year, as the Republican candidate for office, Trump has come out as explicitly in favor of the space, even saying that he wanted all future Bitcoin to be mined on U.S. soil. 

Trump even spoke at last month’s Bitcoin 2024 conference in Nashville, repeating claims that he would remove the crypto-critical SEC Chair Gary Gensler if once more elected to office.

Harris has said very little about the space, but pro-crypto billionaire and serial entrepreneur Mark Cuban told Decrypt last month that her advisors reached out with “multiple questions” about the industry, suggesting a potentially friendlier stance towards crypto than the Joe Biden administration.

Edited by Andrew Hayward