Crypto Market Capitalisation Hits $2.4 Trillion
Surging Price Shows That Bitcoin and Politics Mix Well
The investment world hates uncertainty. Investor anxiety derails activity, and a major topic that makes individuals in the crypto world uneasy is the combination of Bitcoin and politics.
America is in the midst of a hotly contested presidential election. Presently, the votes keep streaming in, but President Trump has already indicated that he will mount multiple legal challenges to the process.
The heart of the dispute appears to be an unprecedented surge of absentee mail ballots that have pushed his opponent ahead..
With uncertainty over who will lead the US economy for the next four years, safe haven assets are on a roll. Gold and select fiat currencies like the Yen are registering gains. Meanwhile, the Bitcoin price is firm above $14,000, defying gravity and feeding on the fear.
How Has Price Been Impact by Bitcoin and Politics?
As of November 5th, we are at the highest price point for Bitcoin since January 2018. A confirmation of its evolution in the minds of investors. The digital asset, similar to gold, is an option for investors who want to store value especially at this time of uncertainty.
A combination of poor monetary policies, the failure to arrest the spread of the Coronavirus pandemic, and conflicts between supporters of leading political parties has been weighing heavy on the economy. The present flux isn not improving the situation.
Amid the conundrum, the scene has been set for Bitcoin. Not only were institutions pouring in, setting up their position and backing the world’s most valuable digital asset in droves, but on-chain factors laid the foundation for expansion to present rates.
How Has The Bitcoin Halving Impacted Price?
Judging from historical price action, it was common for Bitcoin to correct a few days after halving, only to consolidate, before rallying to new highs within 15 months.
Bitcoin seems to be following the same script and partly advising investor’s to re-assess the digital asset, integrating the asset in their often flat-lining portfolios.
In early May 2020, the Bitcoin network slashed its miner rewards from 12.5 to 6.25 BTC. Miners are special computers within the Bitcoin network tasked with confirming transactions and securing the platform from attacks.
Classified as a supply shock since the daily amounts of coins are halved, assuming same demand, the price should correct higher. By the time Bitcoin was halving, each coin was trading at around $10,000.
A combination of fundamental events, investor expectations, and political uncertainty is now pumping Bitcoin. Bitcoin bulls, such as Michael Saylor from MicroStrategy, are adamant that the current rally is just the beginning.
There are numerous factors that can steer Bitcoin towards $20,000 or back to the $10,000 – $11,000 range that it’s resided over the last few months.
The action taken by the central banks to buoy their economies in the second wave of COVID, new cryptocurrency regulation, and institutional investments will have an impact over the course of the next 12 months.
How Is Bitcoin & Politics Intersecting Internationally?
The Financial Market Supervisory Authority (FINMA) of Switzerland has approved Gazprombank, a subsidiary of Russia’s third largest bank, to offer several crypto services including the trading and provision of institutional-grade custody of Bitcoin.
In a statement, Gazprombank echoed comments from other institutions saying digital assets will form a big part of the global economy and in particular, their current and political clients.
The Bitcoin price is trading at $14,511, adding three percent in the last week of trading. As long as prices trend above $14,000 and $13,000, the path of least resistance is Northwards. Analysts are confident that the political situation in the United States will be the primary catalyst in the immediate term.
- $51 + 2.4%
- $51 + 2.4%