The US election is a major event that has global implications for financial markets internationally. Regardless of who wins, it always has a significant impact on the financial markets, as well as the dollar. In this article, we will discuss Biden’s victory, what it can mean for the cryptocurrency market, and whether any predictions can be made at all.
Preliminary election results
Democratic candidate Joe Biden has amassed enough electoral votes to become the President of the United States, and the market is now turning its attention to the consequences of a divided government.
Fun fact: Biden became the first president in history to have his victory recorded on the blockchain. The Associated Press recorded it on the EOS and Ethereum blockchains.
Summary. Despite the criticism of flawed poll data and erratic movements in betting markets on election night, this race is reasonably consistent with historical precedents and recent polls. Biden defeated and turned over most of the faltering states (Michigan, Wisconsin, Pennsylvania, and possibly Arizona).
How did the US election impact financial markets?
When the US media announced Biden as the new President of the United States, bitcoin prices dropped to below 15 000 dollars. However, they quickly recovered above that margin and are currently trading at above 15 400 dollars.
Even before the start of the presidential election, many pundits argued that regardless of the outcome, Bitcoin could probably see a surge when the second round of stimulus packages kicks off.
As the US dollar continues to depreciate due to the massive printing of fiat money to spur the fight against COVID-19, it could draw investor attention to hedges like Bitcoin to protect their funds amid global economic uncertainty.
According to Max Keizer, Wall Street analyst and presenter for The Keizer Report, Biden’s victory means a victory for corruption, so one should expect the price of Bitcoin to rise as people rush to buy it in panic.
“With Trump, the US has a chance for a more orderly transition to bitcoin, so the price will rise more slowly,” concluded Max Keizer.
Summary. With the pandemic in full swing and a divided nation, the certainty of fiat currencies, oil, and gold is unattainable, as there are many possible ways of how financial markets can react to recent events in the long term. With President Trump remaining in power for another two months, instability is likely to persist, especially with the simultaneous elimination of COVID-19.
What will happen to cryptocurrency?
Trump publicly criticized Bitcoin, tweeting that he is not a “fan” of the cryptocurrency. It’s less clear where Biden is in terms of his attitude towards cryptocurrency.
He has not made any public statements on the matter, although his campaign joked that he would not ask for Bitcoin donations after his Twitter account was hacked in July along with many other crypto exchanges, influencers, and media websites.
It is those who take the regulatory positions in the new Biden administration who will determine whether the cryptocurrency gets some freedom to grow or gets hindered.
Namely, the federal regulatory bodies that the President will appoint and the Senate will confirm: the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) chairs, the head of the Office of the Comptroller of the Currency (OCC), and the Treasury and State Ministers.
The price of bitcoin has risen by about 14% since election day and is likely to continue to go up. Why?
At the moment, there are no major problems from the regulatory authorities. The momentum that makes bitcoin an institutional-grade asset in the United States, namely the Token Taxonomy Act and the Securities Clarity Act, have the support of both parties and are unlikely to be forgotten.
Besides, an aggressive Democratic-led bill on economic stimulation could push bitcoin prices even higher. Unprecedented levels of debt and deficits are already weakening the US dollar versus other major global currencies as investors become increasingly concerned about the US Federal Reserve’s ability to service the country’s debt.
Summary. The price of Bitcoin and its analogs will continue to rise until social unrest is eliminated and solutions emerge. The stability of the US dollar is in question.
Conclusion
In turn, the Cratos team monitors the entire dynamics of the crypto market, and we are confident that the growing popularity of crypto assets will only increase. In fact, this is what the article we wrote is about.
Despite the importance and impact of the presidential election, the United States is not a global regulator of the cryptocurrency market. We can only talk about trends and behavior of cryptocurrencies, which are not highly dependent on global political events, and, therefore, will continue to gradually grow.
