The bitcoin price has risen enormously in the run-up to the US presidential elections, with an explosion of 30% in October. This was accompanied by a lot of positive news that bitcoin reached its highest point since the beginning of 2018.
Last week, the Dow Jones Industrial Average closed its worst week (and month) since the coronavirus crash in March. Of course, last week was also the last full week before the Republicans and Democrats prepare for the elections.
Bitcoin, meanwhile, broke with its correlation with equity markets; last week bitcoin even rose by 5% and there was a tidal wave of positive sentiment among investors. Sentiment seems inviolable during such a run, but it is interesting to keep an eye on whether this reverses after the outcome of the elections.
Short or long term
Trump’s victory is likely to be welcomed by stock market players and bitcoin will continue to grow along with other assets,“ said Anatoliy Knyazev of broker Exante to Forbes Magazine. However, a victory for Biden, which could lead to a fall in the stock market, could also work in bitcoin’s favour based on the expectation of the dollar’s depreciation‘.
Safe haven and gold
Real bitcoiners see the cryptocurrency as a safe haven, with the Bitcoin Trader rate possibly rising (along with gold) in times of increased uncertainty and risk.
Markets hate uncertainty, so in the event of a disputed outcome, safe-haven assets will be boosted, especially non-sovereign classes such as gold and bitcoin,“ said Nigel Green, of deVere Group vs Forbes.
Rising public spending
Jeff Dorman of cryptocurrency hedge fund Arca was interviewed last week on the same subject, by Business Insider. Dorman thinks that a victory for Biden could mean a further increase in public spending, and that would be better for bitcoin and gold than four more years of Trump.
In addition, Bank of America economists warned last week that if the outcome is debatable, equities could fall as low as 20%.
There is only one winner
The contrary Max Keizer, a Wall Street veteran and presenter of The Keizer Report, predicts that the bitcoin rate will rise in the event of Biden’s victory. But he is also positive about Trump’s effect on bitcoin. With Trump, the U.S. has a chance for a more orderly transition to bitcoin, so the price will rise more slowly.
Emperor sounds as if he has no opinion. But somewhere he has a point. It doesn’t matter who climbs the White House steps in January. The bitcoin community is convinced that they have long since found the real winner with bitcoin.