Cryptocurrencies, fuelled by investor wait-and-see attitudes and expectations of results from the US presidential elections, surged by about 2 per cent to nearly $69,105.03.Bitcoin, the largest cryptocurrency token by market capitalisation, traded well below its all-time high, and is currently less than 5 per cent from the price it breached in April this year. It reached an all-time high of nearly $70,522.84 on 10 October.The price increased in the wake of the tighter-than-expected race in the US presidential election.The euphoria was shared by associated stocks, too. Coinbase, the largest crypto stock in the world, increased by more than 4 per cent to $371.07, just 0.04 per cent less than its record high, according to The New York Times.The value of MicroStrategy, a struggling company operating in the analytics software market which counts Bitcoin as an asset, also received a boost, rising more than 8 per cent in the stock market.Investors are betting that outcomes-dependent market responses could cause significant price swings depending on the result of the election.
However, Bitcoin prices may be particularly steeped in the 2020 presidential election. Ryan Rasmussen of Bitwise Asset Management, a crypto-asset index fund manager, offers a hypothetical narrative that would propel BTC to new all-time highs if Trump wins and help spur a temporary sell-off if Harris emerges victorious. As Rasmussen explains it, each halving year coincides with a presidential election. ‘And you get this exponential type return payout two years after the election,’ he said, referring to the massive gains that followed Bitcoin’s supply halving during the 2016 and 2020 elections. Policymakers are expected to reduce interest rates, which could prompt a new rise in the price of bitcoin post-election Rasmussen said that this pre-election bump and ‘leveling out [of prices]’ during the election year might pave the way for another ‘post-election exponential type return payout two years after the election’ were Donald Trump to win a second term. ‘There’s some concern about what the 2024 election will mean for Bitcoin prices,’ he added, because the next halving will take place in the run-up to that race. Some traders I spoke to, like those at 99Bitcoins, plan to hold tight after the 2020 election and ‘hodl [because] history will repeat itself’, as Galindez explains it. In the crypto-markets, where price volatility is the norm, the outcome of this year’s election will pass swiftly, with shrewd traders ready to shift gears on a dime once the results are clear.
Source: CNBC
