5 Reasons Election Week Could Send Bitcoin On A Wild Ride

Bitcoin is in for a wild ride during election week 2020. While most savvy investors know that markets don’t like uncertainty, that’s not necessarily a bad thing for Bitcoin. It’s impossible not to talk about what’s happening in the world of cryptocurrency this week without talking about Donald Trump and Joe Biden, but there are four other key reasons that this election week could bring volatility in the cryptocurrency markets to a whole new level. Let’s cover them all.
 

The Presidential Election: Trump Versus Biden

Election day in the United States is tomorrow, November 3rd. That said, mail-in voting is going to play a bigger role in this election than any other election before it thanks to the need for voters to practice social distancing in order to steer clear of the novel coronavirus. This means that what the media usually calls election week is now better looked at as election month.

At the moment, early poll results show that Biden has a significant lead over Trump and experts are wondering aloud whether that’s good or bad for Bitcoin. Many argue that seeing Trump get re-elected is better for the stock market and therefore better for Bitcoin as well. Some see a Biden victory as bad for financial markets simply because the former vice president of the United States plans to be much more aggressive in shutting down businesses to deal with the pandemic.

With Trump vowing to refuse conceding the Presidency and planning to take the results to the United States Supreme Court should he lose, the reality is a victory for either candidate could be mired in a long, arduous battle that makes safe haven investing in assets like Bitcoin much more attractive regardless of who wins.

Coronavirus Lockdowns across Europe

Market analyst Holger Zschaepitz’s warning that economic activity across Europe will shrink, noting that German stocks lost $4.1 trillion in value last week. As one popular anonymous whale investor points out on Twitter (via a German language news article), the European Central Bank’s announcement that more stimulus money is on the way for struggling businesses means that those businesses will get 75% of their cash flow in the form of new money being printed even if their doors have to stay closed.

A Futures Gap Is Open for the Fourth Week in a Row

Bitcoin Futures gaps are typically a very bullish sign for the price of Bitcoin. A gap in futures orders on the Chicago Mercantile Exchange happens when the price of futures contracts open either higher or lower on a Monday than it was on the previous Friday. This week’s gap is pointing upwards, which means a short-term increase in the Bitcoin’s price is very likely.

The Monthly Close of Bitcoin’s Price Is Another Bullish Sign for Institutional Investors

Long-time trader Peter Brandt points out that institutional investors with large Bitcoin treasuries look at month-end asset valuation as a way to determine whether or not they’re doing well. While the next level of resistance for Bitcoin is at the $14,000 USD mark, there is nothing in the way of it heading towards $20,000 USD should it surpass that.

Bitcoin Mining Difficulty Is Moving Lower

Bitcoin mining difficulty is set to decrease by more than 14% which is the most it has fallen since the onset of the pandemic in March. This means smaller miners will be able to participate more in the Bitcoin economy and they will thus earn a greater share of the profits. More mining participation means more crypto miners holding onto the new supply of Bitcoin. That means a short-term increase in the price of Bitcoin is a distinct possibility.

Investing in Bitcoin or any other asset class during times of uncertainty just might provide Bitcoin with the perfect storm it needs to prove itself once again as a safe haven style store of value. Get started with Netcoins if you’re ready to start investing in the future.

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