Election Fever Hits Crypto Markets
As the US presidential election heats up, cryptocurrency investors are on high alert, waiting for direction on the potential outcome. Bitcoin, the world’s largest cryptocurrency, has seen a 2% increase to $69,105.03, according to Coin Metrics, with its price fluctuating wildly in recent days.
Stocks Tied to Crypto Get a Boost
Exchange operator Coinbase and MicroStrategy, a high beta play on the price of bitcoin, have seen significant gains, advancing 4% and 2%, respectively, in earlier trading. This surge is largely attributed to investor expectations of a volatile market until a clear winner is declared.
Experts Weigh In on Election Impact
Ryan Rasmussen, head of research at Bitwise Asset Management, believes the election will have a massive influence on crypto, predicting choppy trading until definitive election results are announced. He expects a Trump win to bring new all-time highs, while a Harris win may lead to a short-term sell-off, followed by a recovery.
Historical Patterns Suggest Price Surge
Bitcoin has historically seen significant returns in the 90 days following election day, with gains of 87%, 44%, and 145% in the 2012, 2016, and 2020 elections, respectively. This trend is partly due to election years coinciding with Bitcoin halving years, which reduce the supply of the cryptocurrency.
Post-Election Returns Align with Fed Policy Shifts
Furthermore, post-election returns have tended to align with major Federal Reserve policy shifts. With interest rate reductions on the horizon, the market is poised for a potential price surge.
Fair Value Price Reached
At around $69,000, bitcoin has reached its fair value price, according to CryptoQuant. This means that if the election proves to be a positive catalyst, bitcoin can rally and establish a new record.
Market Makers Prepare for Volatility
James Davies, CEO at Crypto Valley Exchange, notes that market makers and traders are keeping a close eye on the election outcome, preparing for massive short-term volatility whichever way the result goes.
A Pivotal Moment for Crypto
This year’s presidential election has been dubbed the most important one in the crypto industry’s lifetime, with a Harris win viewed by many as a threat to crypto and a Trump win seen as a potential boon. As the industry holds its breath, one thing is certain – the outcome will have a profound impact on the future of cryptocurrency.
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