Bitcoin is still Bitcoin despite the changing of the times

"America, I am honored that you have chosen me to lead our great nation."

According to the Associated Press on November 7, US Democratic presidential candidate Joe Biden has won more than 270 electoral votes. According to election rules, if the final results are confirmed, the presidential candidate who first obtains 270 electoral votes wins.

That night, Biden trotted up to the podium and delivered a speech, his joy evident in his words.

As the world's most important head of state, his every move has a profound impact on global finance, not to mention Bitcoin and cryptocurrency, a small corner of the world's finance...

Now that Biden’s coming to power is almost a foregone conclusion, the uncertainty surrounding Bitcoin and cryptocurrency may have just begun.

1. Can the US election drive Bitcoin up?

The U.S. presidential election has long been seen as an important catalyst for economic trends, with potential changes in power often shifting the direction of global markets. Many analysts expect the price of Bitcoin to be affected by the election as well.

Bitcoin was officially launched in 2008, a few months after the US election.

On November 6, 2012, after Obama was elected for his second term, Bitcoin rose from $10 to $13.

In 2016, when Trump was elected as the new president, Bitcoin rose from an average price of US$750 to a peak of US$1,032 that year.

Before the election this year, the price of Bitcoin rose from a few months low of $9,900 to a high of $15,985.

Earlier this year, Messari analyst Ryan Watkins explained that U.S. presidential election events often coincide with the start of past bull markets, such as between late 2012 and early 2014 and late 2016 and 2017.

“Not many people know this, but the U.S. presidential election is a leading indicator of a Bitcoin bull run. The 2008 election was such a powerful catalyst that just two months later, Bitcoin was created. The results speak for themselves.”

As for why this is happening, Watkins believes that reduced economic uncertainty “provides fertile ground for Bitcoin to grow.”

“After the election, the reduction in economic uncertainty provides fertile ground for a Bitcoin bull run. The U.S. presidential election has a bigger impact than the Bitcoin halving.”

Since Bitcoin has shown tremendous strength ahead of this year’s US election, there is a good chance that its price will move higher in the coming months.

If history develops as it has, then in theory, Bitcoin will also usher in a new wave of increases after this year's election.

However, is this really the case?

On the first trading day after Biden announced his victory, the three major U.S. stock indexes opened higher and hit record highs during the session. The Dow Jones Industrial Average once approached the 30,000-point mark.

However, the good times did not last long. After opening higher, the three major stock indexes subsequently fell. The gains of the Dow Jones Industrial Average and the S&P 500 narrowed. The Nasdaq Composite Index opened higher but eventually closed lower.

At the same time, the Bitcoin and cryptocurrency markets also experienced a general decline.

Bitcoin plummeted from a high of around $15,400 to a low of around $14,700. The total market value of global cryptocurrencies also fell from $449.2 billion on November 7 to $423 billion, evaporating $26.2 billion in one day.

So far, Bitcoin’s post-election performance this year has not followed previous trends.

Earlier, at the last debate before the election on October 22 local time, Trump teased Biden: "They say that if I am elected, the stock market will boom, and if he (Biden) is elected, the stock market will crash."

Biden responded by saying, “The idea of ​​a booming stock market is just his (Trump’s) wishful thinking.”

In fact, there is some truth in what Trump said.

2. “Sleepy Joe” and his attitude towards blockchain

As we all know, Trump and Biden belong to the Republican Party and the Democratic Party respectively, and there are many differences between the two parties in their attitudes towards political and economic policies.

For example, in terms of tax policy, Trump insisted on continuing the 2017 tax cuts for businesses, while Biden is committed to raising corporate income tax, income tax for the wealthy, capital gains tax, etc.

In the field of supervision, the Trump administration has relatively relaxed supervision on energy and financial companies. If Biden comes to power, he will most likely strengthen supervision on the energy and financial services industries.

In the energy field, Trump tends to increase oil and gas energy, while Biden focuses on clean energy.

On the whole, if Trump's series of policies are implemented, it will indeed be beneficial to the US dollar, US stocks and crude oil, but it will also further fuel financial speculation. The Biden administration's series of policies will be bearish on the US dollar and US stocks, but will further support technology and Internet giants.

Last week, from Tuesday's election to Friday, the Nasdaq index, which represents technology stocks, soared 8.56%. The market seemed optimistic. The rise of the Nasdaq shows the market's desire for Biden to come to power. After all, the Democratic Party supports high-tech companies.

What's more, last month, Trump and Biden were embroiled in scandals one after another.

Interestingly, Trump’s tax bill in China was the first to be posted on Twitter, but when the news about Biden’s youngest son was exposed, it was blocked by Twitter and Facebook. From this point of view, it is obvious that high-tech companies are biased.

In addition to differences between the two sides in policy directions such as regulation and taxation, they also have completely different attitudes towards cryptocurrencies.

Trump, for example, doesn't like Bitcoin very much. In July 2019, Trump posted a tweet a few days after the launch of Facebook's Libra crypto project, launching a harsh attack on the main cryptocurrency. He flatly said that he is not a fan of Bitcoin, that cryptocurrency is not money, and that its value is extremely volatile.

In contrast, Biden is considered to be a supporter of Bitcoin.

In one article, Biden was portrayed as the “Bitcoin candidate.” Although he has not publicly endorsed cryptocurrencies, Biden is a strong supporter of technology and innovation. Back in 2011, he commented on the internet and called it a neutral source: “The internet itself is not an inherent force for democracy or oppression, war or peace. Like any public square or any commercial platform, the internet is neutral.”

Now that Biden has won the election, his attitude towards Bitcoin and cryptocurrency is even more worthy of attention.

Earlier, Qiao Wang, head of DeFi accelerator DeFiAlliance, tweeted that Trump and Mnuchin (U.S. Treasury Secretary)'s hostility towards Bitcoin makes Trump a far behind candidate. Meanwhile, Galaxy Digital CEO Mike Novogratz believes that a Democratic government will be good for the crypto industry, and the ongoing stimulus plan will support Bitcoin's anti-inflation narrative.

From various perspectives, it seems that Biden's coming to power will indeed be beneficial to Bitcoin and cryptocurrencies.

However, as soon as the news of Biden's victory came out, Bitcoin immediately plummeted by $850, a drop of more than 5%, and subsequently fell below $15,000.

The reason why this market situation is completely contrary to expectations.

This was largely because the fairly smooth conclusion of the US presidential election disappointed many cryptocurrency traders who had hoped that the election results would not be decisive. In such situations, Bitcoin would rebound due to its safe-haven properties. As a result, the price of Bitcoin fell sharply on Saturday when the election results were announced without any geopolitical interference.

On the other hand, the joy brought by the election will not last long. From a global perspective, in the past week, which was overshadowed by the US election, the governor of the Turkish central bank and the finance minister resigned, and the lira plummeted 30% from a year ago. The epidemic in Europe has worsened, with France accumulating more than 1.78 million cases, and the pressure on hospitals continues to increase. Italy has returned to lockdown, and Portugal's hardest-hit areas cover more than 71% of the country's population.

Even in the United States, the COVID-19 pandemic is still raging and there is no clear plan. The US dollar is currently in a downturn and is looking for direction. Therefore, the new US president faces arduous tasks in terms of the COVID-19 pandemic, the economy, and stabilizing the decline of the US dollar.

With the global economy in a downturn, it is difficult for cryptocurrencies to gain strong momentum.

More importantly, although the US election is almost settled, there is still one uncertain factor that has not been eliminated. What's more, if this factor is allowed to run rampant, it is likely to drag the world into the abyss.

The uncertain factor is Trump.

3. Where will Bitcoin go after the election?

It is worth noting that although Biden’s campaign success is almost certain now, if he wants to truly take power, he will have to wait until January 20 next year, when the Trump administration’s term officially ends.

That is to say, from now to next year, Trump still has more than two months as president.

When the media announced Biden's election, Trump's fans were not discouraged. Instead, they became more excited and demanded fair voting.

As the representative of the interests of 70 million American rednecks (rural white people in the United States), Trump still has strong supporters among the American people despite his election failure.

Previously, the reason why the vote counting and ballot opening time in various states in the United States was delayed again and again was partly because the rednecks armed with guns interfered with the counting stations.

Now, Trump, who is dissatisfied with the election results, is filing lawsuits across the country.

If the final verdict is unacceptable to Trump, then it is very likely that "the soldiers shouted, the Hangu Pass was raised, the Chu people burned it, and the earth was scorched."

American society, which is already severely divided, is likely to fall into civil unrest.

By then, the U.S. dollar and U.S. stocks will suffer a devastating blow. The cryptocurrency market, with a market value of more than $400 billion, will also be difficult to stay out of it to a certain extent.

However, Bitcoin and cryptocurrencies are not all shrouded in doubt.

Every war in history is often accompanied by a surge in crude oil prices, while the rise in safe-haven products such as gold and silver lags behind, usually falling first and then rising.

Then we also have reason to make a bold assumption.

As digital gold, Bitcoin and cryptocurrencies, which are endowed with safe-haven properties, are also likely to see a wave of astonishing growth in the future.