Bitcoin (BTC)’s strong summer has turned into a strong autumn. However, while the price of bitcoin stands above USD 13,000 (as of writing), opinions vary on how the US presidential election on November 3 might affect the crypto market.
Some commentators speaking to Cryptonews.com fear that a contested election could have immediate knock-on effects on the stock and crypto markets, while others fear that a Joe Biden victory may result in greater financial regulation. However, some take an opposite view, believing that any candidate who keeps the fiscal stimulus coming will ultimately boost bitcoin.
Either way, most industry experts believe that BTC and crypto will thrive in the long term, regardless of who’s in the White House. Crypto has been designed to flout government control, while the current economic climate makes cryptoassets increasingly attractive as investments.
The stimulus question
As far as the stock market goes, analyst opinion has been divided on who would be best for stocks. The view several months ago was that a Biden win would hit the market negatively in the short-term, yet recent reports have suggested that analysts are warming to a Democratic victory.
This mixed view also applies to crypto, with industry observers suggesting different outcomes for bitcoin’s price depending on the election result.
“I think we will see a crypto rally led by bitcoin into election day. After it is apparent we will not have a clear winner right away you will see a market pullback,” said DigiByte (DGB) founder Jared Tate, speaking to Cryptonews.com.
Tate added that we’re likely to have “the most contested election in US history” in November, with voting lawsuits already piling up in September. “We may not know a winner till January.”
The prognosis improves in the event that a decisive victory (either one way or the other) leads to a new fiscal stimulus package being passed by Congress. This is the most decisive factor for eToro analyst Simon Peters.
“This, I believe, is more likely to have an impact on the price of bitcoin. Monetary stimulus in the form of more quantitative easing and negative interest rates could be positive for bitcoin prices as investors begin to view the token as a store of value with the potential for long-term appreciation compared to cash, fixed income products and even gold,” he told Cryptonews.com.
This view is largely shared by ThinkMarkets analyst Fawad Razaqzada, who said that the picture can change slightly depending on whether a stimulus package is agreed before the election.
“If they fail to agree on a fiscal package before the election, then crypto and other risk assets will most likely prefer a candidate that promises more stimulus. In other words, a Biden victory should then be viewed as a favorable outcome in so far as the short-term direction of asset prices are concerned,” he told Cryptonews.com.
Who’s pro-BTC: Trump or Biden?
It’s very hard to gauge who is more (or less) pro-crypto, and opinion on this is mixed among analysts.
“Donald Trump is an outspoken Bitcoin-hater, he’s made it very clear in his tweets that he’s “not a fan”. Cryptos “are not money…and based on thin air”,” said Glen Goodman, the author of The Crypto Trader.
Goodman told Cryptonews.com that, even now, US financial regulators are prosecuting BitMEX’s owners, while the Attorney General, William Barr, is focused on tackling criminality in the crypto world. So despite not having the same pro-business image as Trump, Biden may not change things drastically.
“I fear regardless of the winner there will be a broader crackdown on crypto as the dollar weakens and the Federal Reserve moves to issue its own digital currency,” agreed Jared Tate.
This view isn’t shared by everyone in the crypto industry, with GuardianCircle founder Mark Jeffrey suggesting that another four years of Trump will likely be more favorable to crypto than a Biden presidency.
“Biden seems likely to meddle and try to control it. Some have speculated that we would see an avalanche of new regulations around Bitcoin and crypto — that strikes me as correct,” he told Cryptonews.com.
Jeffrey, therefore, suspects that the short-term reaction to a Biden presidency would be a drop in the price of bitcoin. This effect may not be sustained over the medium- to long-term, however, with Simon Peters adding that a renewed drive to create a USD-based central bank digital currency may boost crypto.
“This could be seen as positive for crypto as, depending on its design, it could provide an advert for distributed ledger and wallet technology, which has the potential to encourage interest in other crypto-assets outside of central bank digital currencies,” he said.
The old song about the new gold
There’s a common view that, regardless of who wins in November, BTC and crypto will continue expanding and gaining wider adoption.
“I also think the attempts to regulate it aggressively would fail, and BTC would continue its steady march up in value as the ‘new gold’,” said Mark Jeffrey.
Simon Peters has a similar view.
“Unless buying and selling, mining or storing of crypto-assets are made completely illegal, I feel crypto-assets will continue to gain wider adoption,” he said.
This will be aided by the current climate of low interest rate, which has pushed investors into looking for new opportunities “to make their money work harder for them,” Peters added.
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