The 2020 United States Presidential Election is less than a month away. In particular, as the opinion polling results reveal that Joe Biden, the Democratic presidential nominee, has his lead over President Donald Trump, the attention has been focused on changes the election result will bring.
The same goes for Digital assets (Cryptocurrencies). Amongst the primary investments, Bitcoin has shown a rapid increase of more than 70% this year alone and hit record highs due to the COVID-19 recession and massive quantitative easing (QE). And now, Bitcoin is at the crossroads: whether it will continue to rise after the election or not.
Biden would be more favorable for Bitcoin than Trump
It seems that the election of Joe Biden would bring much more favorable influences over the digital asset (Cryptocurrency) market than that of Donald Trump. Trump has not aggressively regulated the digital assets, but he is also known for not being a great supporter of digital assets (Cryptocurrencies). In his tweet last year, he said, “I am not a fan of Bitcoin and other Cryptocurrencies,” and also pointed out that “which (Digital assets/Cryptocurrencies) are not money, and their value is highly volatile and based on thin air.”
On the contrary, Biden rarely mentioned about Bitcoin or Cryptocurrencies directly, but he is known to be a supporter of tech policy and financial innovation. Therefore, It seems that Biden will show much more favorable attitudes toward the Cryptocurrencies than Trump. In fact, in 2016, Biden started to accept Bitcoin donations for his presidential election, following Former President Barack Obama among the U.S. political figures.
And last year, Biden’s tweet account has been hacked, and the hacker urged Biden’s followers to send him money in Bitcoin. In his tweet, Biden replied, “I don’t have Bitcoin, and I’ll never ask you to send me any. But if you want to chip in to help make Donald Trump a one-term President, you can do that here,” And Biden also left the wallet address on his tweet.
Cryptocurrency ETFs would be approved but decentralized finance (DeFi) would be regulated
However, It seems Cryptocurrency-related policies will make slightly mixed impacts on the market. Trump has taken a thorough Hands-off approach to the new industries, and he never presented any particular measures to support or regulate digital assets (Cryptocurrencies) or blockchain. On the other hand, since Biden has been promoting financial innovation through appropriate regulations, it could be possible that he will lay down several Cryptocurrency-related policies.
In this respect, experts said that if Biden wins the Presidency, Cryptocurrency Exchange-Traded Funds (ETFs) with underlying assets such as Bitcoin and Ethereum that the U.S. Securities and Exchange Commission (the SEC) stopped passing would be advanced. Contrarily, it seems that he will impose controls on decentralized finance (DeFi) that has grown rapidly during the absent of restrictions. In January, the SEC has already included digital assets and financial technology (Fintech) as examination priorities. Judging from the fact that the SEC recently charged Abra, a cryptocurrency trading platform and wallet service provider, for supporting unregistered security-based swaps in digital assets and foreign currency, the SEC seems to put large scale controls.
Pumping Money makes dollars weaker and Bitcoin stronger
Nevertheless, the dominant opinion is that if Biden gains power, the price of Bitcoin will surge to much higher levels in the macroeconomic environment. Firstly, if Biden wins the presidency at the election after a neck-and-neck race, the defeated Trump may raise an objection and file for a lengthy legal battle. It will cause some considerable uncertainty, which might lead to the rise of Bitcoin’s price once more due to a preference for safe assets.
If Joe Biden wins the White House through this course, he can put large-scale economic stimulus programs to pull the U.S. out of recession since he has put more aggressive financial stimulus packages than Donald Trump. In this case, the national debt-to-GDP ratio of the U.S. would continue to increase. Furthermore, the Federal Reserve is still continuously conducting QE, and this may substantially weaken the U.S. dollar. Under these circumstances, the hash rate of Bitcoin is still showing an uptrend, so the price of Bitcoin will show increases for quite a long time.
*This research and analysis document has been prepared for the purpose of providing information that can be used as a reference based on our reliable data and information, but we cannot guarantee its accuracy or completeness.
*The document has reflected the individual’s opinion and it may not be consistent with the company’s official point of view.