U.S. election is the cause of Bitcoin “quite bull market”

Sajjad Hussain
Nov 12 · 3 min read
Image for post
Image for post

The recent turbulent US election event has played a great catalytic role in the rise of Bitcoin’s market price. The current market price of Bitcoin has successfully exceeded $15,000. Aside from the multi-round wonderful debate between the two US presidential candidates, in terms of market capital flow, the current period should be the closest moment in the history of Bitcoin development to the global reserve currency.

In July 2019, when the then-U.S. President Trump questioned whether Bitcoin and other digital currencies have the effect of real currency through Twitter, he expressed some views that the US dollar is “the only real currency in the United States”, “reliable and trustworthy “, “The world’s most dominant currency”, and “it will always remain in this state.” However, what is unexpected is that this year’s situation has turned abruptly, the US election has been turbulent, and Bitcoin has soared to the highest level this year.

In fact, since the development of the digital currency industry, the value of Bitcoin has long been closely related to the entire cryptocurrency market. This round of Bitcoin’s surge is not only closely related to changes in the international financial situation, but the deeper reason lies in the rise of the blockchain industry, which simultaneously drives the prosperity of the digital currency market led by Bitcoin.

So far, 23 companies worldwide hold approximately $10.5 billion worth of BTC, accounting for 3.74% of the total Bitcoin supply, including 15 publicly listed companies, 3 private companies and 5 ETF-based companies. Many people believe that this trend of companies buying and holding Bitcoin is a turning point in Bitcoin’s widespread adoption, and it is also the first major step in the road to digital becoming a global reserve currency.

From the current point of view, it is not impossible for digital currency to become a global reserve currency. As a trading medium, Bitcoin is currently the largest digital asset by market value, although it is far from reaching a level that can rival the US dollar. But more and more companies, including major international companies such as Microsoft, Expedia, and AT&T, have accepted Bitcoin as an effective payment method. In addition, in order to resist inflation or circumvent capital controls, Bitcoin has become the preferred community currency in Venezuela, Cuba and even Greece. It is both a daily medium of exchange and a store of value.

However, considering that the standard deviation of the Bitcoin price is about 10 times higher than that of all G7 currency pairs, the current price of Bitcoin is also very volatile, so it cannot be used as a means of payment or an actual accounting unit. At the same time, due to the lack of carrying capacity of the Bitcoin network system, the network ecology cannot produce interaction, so it does not have high value preservation. If Bitcoin must be regarded as a global storage currency, the actual financial risk is too great.

It can be seen that, if digital currency is to truly become a global reserve currency, the real difficulty lies in achieving higher liquidity and more stable value preservation, which requires powerful ecological applications and rich interactive scenarios to achieve. In the current blockchain industry, such projects are actually very lacking. If digital currency is to truly become a freely circulated, high-value global storage currency, it is necessary to continue to increase the offline circulation of digital currency. Expand a wider range of financial attributes.

Crypto Pundit

Missing Crypto news

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store