How The 2020 Presidential Election Results Will Impact The Price Of Bitcoin and Crypto
The impact of elections in one of the most powerful countries in the world is incredibly high. There was a tough race between top favorites — the incumbent US President Donald Trump and Democratic candidate Joe Biden.
The latter has won the election and it is expected that many country development projects will change in almost all spheres, including the economy.
During elections, the markets were traditionally “stormy,” but the results have left the holders of “safe” assets like gold and Bitcoin in the black.
The Future of Bitcoin and Other Cryptocurrencies
On the Bitcoin futures price chart, a “gap” has formed. Gaps are formed when the closing price at the end of one trading week varies significantly from the opening price at the beginning of the second. Historically, the BTC / USD pair has been moving towards “filling” such gaps.
It was expected that if Trump remains president, it would be worth waiting for the growth of the first cryptocurrency or stagnation of the market, and a downward correction would begin if Biden won.
It was unclear whether Trump will continue to stimulate the economy with “helicopter money,” some of which would go to bitcoin and support the business.
According to CoinMarketCap, on the morning of November 6, 2020, bitcoin (BTC) rose 8.38% to $14,945. On the Binance exchange, the largest cryptocurrency exchange in terms of trading volume grew by 7.95%, to $15,005.
Thus, bitcoin, which accounts for 65.1% of the entire global crypto market, exceeded the psychological mark of $15,000 for the first time since January 2018.
Did the Sudden Growth of Bitcoin Depend on the US Elections Alone?
Bitcoin has been growing in recent days in a general trend with other risky assets. For example, the S & P500 index rose by more than 5% in three days.
This growth in assets was due to the approaching end of the presidential race in the United States, in which Joe Biden was still in the lead. Investors understand that Biden’s victory promises new large-scale investments in the US economy.
This means an increase in risky assets and a decline in the US dollar.
At the same time, new assistance to the markets would not depend on who becomes the new president. Only its size will depend on this.
Therefore, you could assume that in the future, BTC will continue to grow. Now that Biden has won the presidency – among other factors – the next target of the BTC / USD pair is expected to be $17,300.
Issuing Money to Boost the Economy
Outside the US, markets in Europe look grim as the continent reintroduced quarantine restrictions due to COVID-19.
Against the backdrop of new warnings about the contraction of economic activity connected with these measures, markets began to ignore even optimistic signals related to the elections.
The rise in the Bitcoin exchange rate has led to an increase in interest in this financial instrument among global Internet users.
The number of searches in the Google search engine began to grow on November 4, when the cryptocurrency rose in price to $14,000.
This factor will also enhance the growth of the cryptocurrency rate. However, it is worth remembering that any crypto is a purely speculative instrument; therefore, you must fully understand the risks of these actions when buying or selling it.
To minimize the risk, Bitcoin is worth investing only a small part of the total portfolio. It is worth purchasing a financial instrument after the correction.
Bitcoin is one of the few more or less liquid cryptocurrencies, so if someone wants to make money on growth speculatively, he uses it, the expert adds.
Hence, there is such an interest in this particular crypto in the absence of interest in others.
Growth Was Predictable
At the same time, many analysts believe that bitcoin’s return should not be attributed to significant events. Instead, it results from a combination of circumstances associated with uncertainty on world markets regarding traditional instruments.
The growth of the top crypto has been influenced by the United States’ elections, where results are out and Joe Biden has won, lockdowns in the European Union, and the generally disappointing statistics with the coronavirus, which are depressing the global economy.
A gradual rise in the bitcoin rate that began in early September can be linked to these events — it was in early September, optimism regarding the lifting of restrictions on covid-19 started to move into the phase of another depression gradually.
During that period, the race between the two candidates for the US presidency began to affect the markets more and more. During this period, Bitcoin and Ethereum grew by 53%.
So, on September 4, it broke through the local minimum of $9,800, and in November broke through at some sites the cost of $15,600.
The last time Bitcoin rose to the $15,000 mark was in January 2018. It cost even more in December 2017 — $20,000, but this price did not become a guarantee of stability for cryptocurrency.
According to Business Insider, such a noticeable jump in the bitcoin rate can quickly come to an end. And this is expected to happen as elections are over and it is clear who the winner is.
The cost of the most popular crypto for the first time since January 2018 exceeded fifteen thousand dollars. Its growth looks like a transient response to the political situation in the United States, but at the same time, it was anticipated in advance.
The fact that only bitcoin is growing is an entirely normal phenomenon. In addition to elections and the coronavirus, many other factors also affect its quotes; the most important is transactions with this currency type.
Its stability is strengthened and will continue to do so if large companies invest in it, and not just individuals. Joe Biden having won the presidential seat means more investors will flock the US market investing heavily in Bitcoin and other cryptocurrencies at the same time weakening the dollar.