What impact will the US election have on cryptocurrencies?

Original author: Billy Bambrough

Source: Forbes

Bitcoin will face the impact of the US election this week

The voter turnout in the 2020 US election will reach a century high, and major campaigns and candidates have also occupied the headlines of major media. The price of Bitcoin has soared before this election, even rising sharply by 30% in October, and hit a new high since the beginning of 2018 driven by a series of good news.

Currently, with Democratic candidate Biden clearly ahead of incumbent President Trump in national polls, Bitcoin traders and investors are also preparing for the final day of the election, while global markets are on edge.

The Dow Jones Industrial Average closed last week with its worst week and month since the coronavirus outbreak in March, while both Republicans and Democrats prepare for the final round of the presidential campaign.

Meanwhile, Bitcoin has broken its long-standing peg to the stock market and surged 5% over the past seven days, sparking a wave of bullish sentiment among Bitcoin investors not seen since the historic bull run in 2017, and it seems that this will not be shaken regardless of the outcome of this week's election.

"A Trump victory would likely be welcomed by stock market players, while Bitcoin and other assets would continue to grow," Anatoliy Knyazev, executive director at brokerage Exante, said in an email. "However, a Biden victory would likely lead to a decline in the stock market, but could also be favorable for Bitcoin based on expectations of a weaker dollar."

Bitcoin investors support the cryptocurrency because they see it as an emerging safe-haven asset, and its price is likely to rise along with assets like gold during times of increased uncertainty and risk.

“Markets abhor uncertainty, so safe haven assets will be boosted in the event of a contested outcome, especially non-sovereign assets such as gold and bitcoin,” Nigel Green, CEO of deVere Group, said in an email.

Economists at Bank of America warned last week that stocks could fall by as much as 20% if the U.S. election is closely contested.

Jeff Dorman, chief investment officer of cryptocurrency hedge fund Arca, told Business Insider: " (Investors) just want to know who the winner is going to be. " And Dorman believes that a Biden victory means unprecedented levels of government spending, which will be more beneficial to the development of Bitcoin and gold than another four years of Trump .

"I think the Democrats are better as a hedge against inflation, but as long as there's a clear winner, everything's going to go higher," he added.

Meanwhile, other more radical figures in the Bitcoin and cryptocurrency community also believe that a Biden victory would mean that Bitcoin could see a significant rise this week.

Contrarian investor, Wall Street veteran, longtime Bitcoin supporter Max Keiser, host of RT's The Keiser Report, predicts that Bitcoin prices will "soar" higher after a Biden victory, which will also trigger unfounded concerns that a Biden administration will confiscate "everything."

However, despite Trump’s unexpected setback in the polls, Keiser remains bullish on Bitcoin’s price development.

In an interview with Bitcoin and cryptocurrency news outlet Cointelegraph, he said: “ A Trump victory would give the U.S. a chance to have a more orderly transition to Bitcoin, and the price of Bitcoin would rise more slowly .”

Regardless of who wins the White House this week, the bitcoin and cryptocurrency community is convinced that they are backed by a winner.