- Approval of a new stimulus package will positively boost Bitcoin price after elections.
- Experts agree that the Bitcoin price will rise in the short- and longterm in the next months.
Bitcoin consolidates around the resistance level at $13,548, at the time of publication. The cryptocurrency has had one of the best months in terms of performance. Driven by an unprecedented wave of adoption, the results of the U.S. presidential election will be decisive for the future of Bitcoin (BTC). Preliminary data shared by Messari CEO Ryan Selkis indicates that the election will be close.
welcome to hell pic.twitter.com/XQRJSwDfn1
— Ryan Selkis (@twobitidiot) November 1, 2020
Uncertainty prevails in this scenario, reflected in experts’ predictions. Most don’t see a clear winner, but everyone seems to agree that Bitcoin will benefit from any of the results. Exante’s CEO, Anatoliy Knyazev, said the following in an interview with Forbes:
A Trump win will probably be welcomed by the stock market players and bitcoin will keep on growing along with other assets. However, a Biden win, which may lead to a stock market fall, could also work in bitcoin’s favor based on the expectation of the depreciation of the dollar.
Bitcoin in the short term, time for the bulls
The determining factor for Bitcoin in the election result seems to be the approval of a stimulus package. After the fall of the crypto market in March, the approval of measures to combat the crisis caused by the coronavirus pandemic (Covid-19) was important for the subsequent performance of Bitcoin.
In the short term, BTC absorbed a large portion of the stimulus approved at that time. At least in terms of adoption, BTC has established itself as a safe haven for many companies seeking refuge from the U.S. Federal Reserve‘s inflationary measures.
According to senior commodity strategist for Bloomberg Intelligence, Mike McGlone, adoption is one of the key factors for Bitcoin’s price. As adoption has increased, the cryptocurrency has managed to decouple itself from the traditional market and reduce its volatility by acting as a digital version of gold. The creator of the Stock to Flow model for Bitcoin, PlanB, has responded positively to the news of a possible approval of a new stimulus package. Something that seems to be imminent with any of the current presidential candidates.
This is good for #bitcoin ? https://t.co/bYzB1NxPa8
— PlanB (@100trillionUSD) October 30, 2020
McGlone has also indicated that the emergence of Bitcoin futures has served as a means of decoupling from the traditional market. In that sense, data analysis firm Skew has indicated that Bitcoin futures on the main exchanges have an implied move due to the elections, as can be seen below.
It's election day!
Options traders are pricing in a little bit of extra premium for this week with a 3.5% #bitcoin implied move for the election pic.twitter.com/aUG1XuDhsG
— skew (@skewdotcom) November 3, 2020
Trader Flood has been very bullish. Predicting a price break above $13,800 Flood said that Bitcoin is the best asset to trade with today. Flood added that Bitcoin will remain above the referred level. Therefore, he said “I’m not looking for a short position”.
In that sense, former Goldman Sachs employee, Raoul Pal, has made an analysis of the current election risk for Bitcoin. Being optimistic about the future of the cryptocurrency, Pal believes that the next few days will be “of chaos”, but that the result will be positive for the market afterwards:
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The next 48 hours of mayhem, the risk is potentially the opposite (nothing to do with who wins). Everyone is ALL in on reflation.The contrarian in me is suggesting if everyone is expecting the same outcome then the odds of that outcome playing out as expected, are lower.
