How Joe Biden’s election could affect Bitcoin in the short term
Joe Biden’s presidency could initially have three effects on Bitcoin’s price development.
On November 7th, after four long days of counting votes, several news outlets proclaimed Democratic Party candidate Joe Biden as election winner and thus President of the USA.
The uncertainty about the election outcome is over, which is why the crypto analysts can now grapple with the possible effects of a Biden presidency on the industry and on the Bitcoin Up price. The three decisive forces that can initially be assumed are new aid payments for the economy, a stronger US dollar and a resurgent stock market.
Aid packages could also help Bitcoin
Before the election, the incumbent President Donald Trump announced that he would not hold talks about further aid packages for the economy until after the election. Accordingly, Democrats and Republicans no longer came to a common denominator.
Biden’s victory increases the likelihood that there could be a new aid package before the end of the year. The American Congress already had cash injections of 2.2 trillion in October. US dollar proposed , but rejected by the Republican Senate, which has a majority.
New corona aid payments could also have a positive effect on Bitcoin, because this would ease the financial situation for many households and companies in the USA. If the US economy is successfully stimulated, the willingness of investors to invest in speculative investment products such as the market-leading cryptocurrency increases.
The perception of Bitcoin is changing more and more from a speculative investment product to a means of hedging against inflation. Nevertheless, the Bitcoin price often moves in step with the stock markets, so even if interest in speculative investment products does not return immediately, an economic upswing could also fuel the crypto market leader.
A strong US dollar would be bad for BTC
If the Biden administration were to actually pass new aid packages, it will likely strengthen the US dollar as well. When the European Union (EU) initiated aid payments for its part, this gave the euro a boost, which is why it can be assumed that the same will apply to the US dollar.
The US dollar has been weakening against the reserve currencies since March. This was to the advantage of stores of value like gold and bitcoin, which traded in the currency pair with the US dollar and could benefit from its weakness.
If the possible aid payments should stimulate the economy and strengthen the willingness of investors to invest, this would initially have a positive effect on Bitcoin, but a strengthened US dollar would exert selling pressure on the crypto currency in the long term.