The U.S. is preparing for the results of the 2020 presidential election, but according to some analysts like Dan Popescu, there is a possibility of economic ramifications between the U.S. election and Bitcoin, and whoever wins, Bitcoin's rise will continue.
On Tuesday 03 November 2020, Americans go to the polls to decide whether they want to re-elect Donald Trump or elect Joe Biden to the White House. Many are wondering what impact the outcome of this election will have on the markets, especially on the price of Bitcoin and speculation.
In August 2020, some analysts had predicted that the results of the U.S. presidential election could lead to a collapse of the dollar and boost the price of Bitcoin and gold.
Analyst and consultant Dan Popescu said in a tweet:
'Gold will correct itself with the victory of Donald Trump, followed by the collapse of the U.S. dollar. Bitcoin, on the other hand, has everything to gain in this election. '
Being specialized in gold, silver and forex, Popescu had shared in August 2020 on the podcast 'IG Trading the Markets' his perspectives on the evolution of the gold and US dollar markets before and after the US presidential election.
'With Trump's victory, we will see a collapse of the US dollar with a parallel correction of the gold price with an explosion to nearly $5000. This will happen more quickly with Trump than with Biden but in both cases we will see an upward trend in the price of the precious metal. The US dollar will risk falling in both cases. '
Popescu added that according to current polls showing that Biden is the candidate most likely to win the 2020 presidential election, the dollar will weaken and gold will rise even higher as the election approaches. He said:
'Right now, the markets are expecting Joe Biden to win, that's one of the things I'm sure it's been bullish for the price of gold and the collapse of the dollar index, that's going to continue'.
Popescu also predicted what will happen in the stock market if Donald Trump wins the election:
'The American stock market is very bullish and loves Donald Trump because he has reduced taxes for the super-rich, he has reduced taxes especially for companies operating in the stock market, which has been very bullish for the stock market. On election night, if Trump wins, the dollar will rise along with the stock market and gold will rally. However, this will be temporary 'because the monetary crisis will be all the stronger with Donald Trump'.
Presidential elections in the United States are held every four years. Would it be possible to think that there is a correlation between successive increases in the price of Bitcoin and U.S. presidential elections?
Let's start by looking at Bitcoin's performance in the last two U.S. elections. After Obama's election in 2012, the price of Bitcoin rose by more than 10,000% the following year. Trump was elected in 2016, and Bitcoin jumped more than 2,500 percent the following year.
By 2012, cryptomoney was still in a very nascent phase. By the time Barack Obama got his second term, the price of Bitcoin had stubbornly hovered around the $10.90 mark. By November 2013, one year after his re-election, Bitcoin had jumped 2,221% to $253.
In 2016, following the presidential election between Donald Trump and Hillary Clinton, Bitcoin jumped 4% from $709 to $736.
According to Charles Hayter, CEO and founder of CryptoCompare:
'Trump's presidency gives a boost to Bitcoin at a time of global uncertainty and fear. »
Donald Trump's historic victory in the 2016 U.S. presidential election took the stock market by surprise by creating international uncertainty and volatility. This led to a demand for safe haven assets, Bitcoin is considered one of them.
Looking at the 2012 and 2016 elections in the United States, it is almost certain that crypto acts as a safe haven and protection against periods of uncertainty. Will this also be true for the November 2020 election?
By the way, Ryan Watkins, a researcher at Messari, compared the two elections and concluded that:
'Few people know this, but the U.S. presidential election is a leading indicator of Bitcoin's 'bullish' potential.'
Bullish or Bull market refers to a market with an upward trend.
On the eve of the election, the price of Bitcoin soared, increasing massively by 30%. It turns out that Bitcoin doesn't care who will win the American elections, its value seems to be ready to reach highs never seen since the beginning of 2018.
In an interview with Business Insider Jeff Dorman, Investment Director of the cryptocurrency hedge fund Arca said:
'The value of Bitcoin will increase no matter who wins the U.S. elections. A series of positive advances for Bitcoin last week have reduced the fear factor for investors to enter the digital market. Most Wall Street conservatives don't want to be the first, nor do they want to be the last'.
Polymarket is a platform created on the basis of the Ethereum blockchain and Gnosis' open framework of conditional tokens that allows users to place bets in crypto on hot topics and hotly debated public issues, including politics, pop culture, business and health, according to its website.
With Polymarket, anyone can place a bet on a controversial topic via the USDC stablecoin. And if the result is right, you can expect a profit.
There are currently three main categories of topics on the Polymarket platform, which is still in beta version, namely:
- New Crown,
- American political topics and
On Monday, November 02, 2020, the platform launched the famous 'Will Trump win the 2020 U.S. presidential election' bet, having placed over $2.8 million in bets, each bet (for possible 'yes' or 'no' answers) costing less than a dollar.
Recently, elections and political debates have been at the heart of betting platforms in cryptocurrency like Polymarket.
David Liebowitz, the vice-president of business development for the decentralized encyclopedia Everipedia told Coindesk:
'For me, the presidential election is the Super Bowl of prediction markets. Each of them is experiencing a massive increase in trading volume. It is only natural that crypto will follow suit'.
Shayne Copland, founder of Polymarket said:
'There are people who use it, who are not even native users of cryptos. They don't even fully understand cryptocurrency, but they still use Polymarket'.
If we look at the US presidential elections of 2012 and 2016, it is indisputable that the price of Bitcoin and other cryptocurrency is positively impacted, but for 2020, it is still too early to confirm it? Let's wait for the results!
Written by Laetitia Harson
Cartam: Free marketplace for cryptocurrency users
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