This November 3 the presidential elections are held in the United States. Donald Trump, the current president and the candidate of the Republican Party, faces Joe Biden, the candidate of the Democratic Party, mainly known for being the vice president of Barack Obama from 2008 to 2016. Voters in the United States will decide whether Donald Trump remains in the White House four more years or not. What does a possible re-election of Donald Trump mean for the economy? And what does it mean for cryptocurrencies and Bitcoin?
Although cryptocurrencies were created to separate from the financial system, both Bitcoin and the rest of the digital assets do not move outside the economic system of the dominant countries. In the sphere of cryptocurrencies and blockchain, it is difficult to get rid of politicians and vice versa.
Short-term events not only affect traditional economies and all eyes in 2020 are on the US presidential elections. But, despite the immense benefits of blockchain and digital currencies, not everyone is willing to make use of them or believe in their potential.
The decentralized nature of cryptocurrencies and blockchain has always been a hard pill for most governments to swallow, and the United States is no exception.
Donald Trump cryptocurrencies and Bitcoin What to expect?
The 45th President of the United States is very aware of Bitcoin and does not like it. In July 2019, Trump unleashed a scathing attack on the major cryptocurrency in a tweet that came days after the launch of Facebook’s Libra cryptocurrency project. He categorically stated that he was not a fan of Bitcoin, cryptocurrencies are not money and their value is very volatile.
The Trump administration has failed to create a clear regulatory framework on digital currencies and blockchain. However, in March, the Office of the Comptroller of the Currency announced the appointment of Bitcoin bull Brian Brooks as its chief operating officer. The appointment was seen as an endorsement of blockchain technology by the Trump administration.
Now, the former US Vice President and the only Democrat running for a presidential seat after Bernie Sanders retired is presumed to be a Bitcoin supporter. In one article, Joe Biden was portrayed as “the Bitcoin candidate.”
While he has not come out publicly to endorse cryptocurrencies, Biden is a strong supporter of technology and innovation. In 2011, he commented on the Internet, calling it a neutral source: “The Internet itself is not inherently a force for democracy or oppression, for war or peace. Like any public square or any commercial platform, the Internet is neutral.
Additionally, the Political Action Committee, which was campaigning for Biden’s presidential candidacy, began accepting Bitcoin donations in 2016. According to the PAC director at the time, the move was in line with Biden’s’ support for the technology and innovation throughout his career.
But how do both candidates influence cryptocurrencies and Bitcoin?
Cryptocurrency macro-analyst Alex Krüger fears that Joe Biden’s election could lead to increased taxes and more regulations. Both of these factors could increase pressure on the economy and the stock market.
Furthermore, Biden, together with the US Federal Reserve, could continue to apply a loose monetary policy and thus send the US dollar lower. This could benefit precious and base metals and Bitcoin in particular, which are valued against the dollar, He said Krüger.
For his part, a re-election of Donald Trump could mean a different scenario, although more optimistic. According to Kruger, a Trump victory “would require some adjustments, but would lead to an even stronger bullfight. Everyone wins. A senior Credit Suisse executive shares Krüger’s view.
According to Suresh Tantia, the stock market could experience a 5% decline after the elections. In addition, he stressed that the fiscal policy of the FED has not had any notable effect, neither on the stock market nor on the dollar. The continued falling trend of the dollar and the stagnation of the stock market could boost sentiment around Bitcoin and gold in the long term.
The future of cryptocurrencies in your hands
However, as Krüger also pointed out, a new economic stimulus package could have an even greater impact on the price of Bitcoin. According to the expert, it is highly unlikely that another package will be approved before the elections. Instead, he expects it to be approved in the first half of 2021.
According to Krüger, this could have an even bigger macroeconomic impact on Bitcoin and gold. A second stimulus package would ease considerable pressure on all asset classes and have a positive impact on Bitcoin.
As the cryptocurrency market continues with its highs, the bitcoin world is watching closely what will happen next November. Without meaning to, Trump and Biden have the future of assets in their hands.