This is a promoted article provided by Safetrading.
One of Bitcoin’s key properties is the fact that it is free from control by any third party, including politicians. But the fact is that the price of Bitcoin relative to fiat can swing significantly as the result of political and legacy economic activity. For evidence, look no further than U.S. presidential elections.
Though major media outlets, including the Associated Press, have called the 2020 U.S. Presidential Election in favor of Joe Biden, lawsuits and contention from Donald Trump’s camp have meant that official results appear some distance away. In the meantime, according to Safetrading expectations, it is clear that the price of BTC will be affected.
“While the United States prepares for the results of the 2020 Presidential Election, a number of data points and traders expect some significant cryptocurrency price fluctuations,” per Bitcoin.com. “Statistics from skew.com show Bitcoin’s 30-day implied volatility has increased to 59% while 3-6 month stats jumped over 62%.”
To figure out more precisely what will happen to the BTC price, it may be worth considering how previous presidential elections have played out. In 2012, shortly after Bitcoin was first introduced and Barack Obama won a second presidential term, the price of Bitcoin remained around $10.90, according to CoinMarketCap. In 2016, when Donald Trump defied many mainstream expectations to win the presidency, the price of BTC rose quickly by 3.8 percent, possibly based on anxiety about how the mainstream economy would be affected.
But the fact is that Bitcoin’s price is notoriously volatile and difficult to predict. Since it is not pegged to any mainstream asset and offers only a few years of historical precedent, nobody can be exactly sure how the latest election will influence BTC.
Still, that level of uncertainty could be a reason for optimism in itself.
“It’s worth reiterating that no matter who wins, there will be some level of calamity,” City A.M. reported. “A Trump win continues the pattern of unpredictability at home and abroad, leaving markets jittery and uncertain. A Biden win would result in the long-term calm but it is highly unlikely Trump will go quietly and chaos will reign into the new year. Expect volatility in traditional markets and opportunity in digital assets.”