- >What Effect will the US Election Have on Bitcoin?
What Effect will the US Election Have on Bitcoin?
If we learned anything in 2020 about bitcoin, it is that the price is not immune to political events. If it were, then bitcoin wouldn’t have taken a 30% hit on March 12th with the rest of the markets. The next question on everyone’s mind is this. What impact will the US election have on the price of bitcoin? I think the most surprising answer might be, “nothing at all”. However, that’s not what we think is going to happen. One of the most common sentiments in the bitcoin community is that it is a hedge against uncertainty. One thing can be said for sure, the outcome of the US election is definitely not certain.
Keegan Francis | Oct 14, 2020
The Three Outcomes for Bitcoin
We realize that there are far more than three possible outcomes for bitcoin in the coming election. However, in the interest of simplicity, we’ve boiled things down to three possible outcomes worth exploring.
Business as Usual
The most unlikely scenario that we can imagine, is that everything continues as normal. The reason why we think this is unlikely because of the mounting tensions surrounding the US election. The tensions are tantamount to uncertainty, and people like hedging uncertainty with things like gold and bitcoin. Business as usual would mean a peaceful transition of power, and neither side is upset with the end result of the election.
An Unpeaceful Transition of Power
It doesn’t really matter if Biden or Trump ends up winning. In either scenario, there is likely to be a large group of unsatisfied, and perhaps even outraged, portions of the population. What is not certain, is whether or not this will have an effect on the price of bitcoin. Because it is uncertain, there is a good likelihood that many crypto traders will be speculating on this exact outcome. It is difficult to imagine the price of bitcoin going down amidst a nation in chaos, but that is possible too. What is more likely from our standpoint, is people will continue to stock up and HODL their bitcoin until some degree of stability has returned to the nation.
There is always room for the wildcard scenario. This covers the probability that something happens that no one was expecting. These scenarios typically manifest themselves unexpectedly, but in hindsight, it feels like it was obvious. All manner of possibility fit into this category. It could be that BitcoinSV overtakes bitcoin in a flash buying frenzy. Then it’s possible that ETH 2.0 finally comes out and provides a money infrastructure for a nation in chaos. The point is, we really don’t know. We’re all still dealing with a global pandemic, unprecedented money printing, and deep civil unrest. In our estimation, a wildcard scenario is more likely than business as usual.
Only Time will Tell
We’re less than a month away from finding out what will happen to bitcoin as a result of the US election. As we approach the date of the election, the outcome will become more clear. We expect to see a steady, moderate climb in the price, to reflect the uncertainty within the US. That being said, the wildcard scenario is possible at any point and time. With all this talk of uncertainty, it’ll be good to leave you with some things that are certain.
Bitcoin will continue publishing blocks, regardless of the outcome. Bitcoin doesn’t care who is president, and it doesn’t care what price people are trading bitcoin at. For most people invested in bitcoin, this is good enough. The fact that bitcoin doesn’t care about the election is exactly the reason why some people are so heavily invested in it. In a world where the media is dominated by content on the effect of the US election, it is nice to know that there is a system of money that simply doesn’t care.