The U.S. presidential election is upon the nation. Everything seems to hang in the air until the official result, including the fate of Bitcoin prices.
Just as the political analysts discuss the future the country’s economy, the world of cryptocurrency ponders if the result of the U.S. election will affect the current Bitcoin prices.
History of Bitcoin prices surges
It has been observed in the past presidential elections that there’s been positive movement—a surge—in prices for the digital currencies, specifically for Bitcoin.
Of course, there’s no exact study correlating the surge of Bitcoin prices directly due to the result of the presidential election. During Barack Obama‘s administration, a surge was observed only a year after his re-election.
Although, it should be noted that when Obama took office again in 2012, “BTC was fairly muted.” The digital market was on its early stages. But in 2013, BTC skyrocketed to 2,221%, recording $253 in price.
Fate of the BTC price in the 2020 U.S. election
With the global pandemic heavily affecting the financial market, the “high institutional investor demand for bitcoin” is expected post-COVID-19. As the uncertainty continues to loom the dollar value and the stock market, it is expected that many will revert to investing big on crypto, especially on Bitcoin and Ethereum.
Correlation and analysis are being read between the stock market and the digital market. Generally, the fall of the stock market will likely surge the demand for crypto.
Accordingly, BTC will be treated as a “boon for safe havens” similar to gold. Meanwhile, FXStreet says the top digital currency “may experience high volatility.” It appears that while all other altcoins are experiencing massive losses, BTC rallied above $14,000. This actually marked a “new nearly high” on October 31.
AWESOME NEWS for #crypto folks from the crazy US election tonight—@CynthiaLummis won #Wyoming’s US Senate seat!! The US Senate now has an unabashed #bitcoin supporter & HODLer (since 2013) among its ranks!! CONGRATS Cynthia! @willcole @CynthiaMLummis 🤠🚀🔥 pic.twitter.com/8SCF9pkRSg
— Caitlin Long 🔑 (@CaitlinLong_) November 4, 2020
Furthermore, The Hill notes that the performance of the stock market somehow effectively predict the result of the election. It is said that “[w]hen the S&P 500 Index falls in the three months leading to the presidential election, the incumbent president has lost the election 88 percent of the time.”
Cointelegraph notes the market is on magnified watch on today’s national election, as it awaits possible “clues” for the incoming president’s future policy. Many believe that the re-election of Trump would cause the stock market to rally more likely due to the imminent continuity of his policies, especially on tax cuts.
– #Bitcoin hit highs not seen since January 2018
– #DeFi volumes slipped in October reflect a broader downward trend
– Stock markets are becoming increasingly volatile as the US election is less than 24 hours awayhttps://t.co/qieBprPYyz
— AAX (@AAXExchange) November 2, 2020
Analysts further ponder that a Democratic win will likely “negatively impact the stock market.” Although recently, the massive damage brought by the pandemic is what’s causing the major plummet. In fact, the stock market took a big blow when the current POTUS Trump tested positive for COVID-19.
Moreover, the delayed results of the U.S. presidential election could likely drag the stock market as well. Most especially when it becomes a disputed election. As many know, President Trump is very vocal about bringing the results to the Supreme Court should he believe he lost due to election fraud.
CoinMarketCap highlights that this drag would “spook the stock market,” which will actually be favorable for the digital market. Lastly, it is observed that a “clear result and a peaceful transition of power” will not cause a dramatic movement in digital assets. While a possible election dispute will likely trigger great “turbulence.”
Featured image courtesy of Ewan Kennedy/Unsplash