On November 7, a number of major media announced that after 4 days of strict vote counting in key battlefield states, Joe Biden had won enough electoral votes to become the 46th President of the United States. States.
As the excitement of an extremely close election begins to subside, analysts will take a closer look at how Biden’s presidency may affect traditional markets and Bitcoin’s price. Three main factors to consider are that will eventually adopt a new round of economic stimulus, a stronger US dollar, and a resilience to the stock market.
Economic stimulus could push Bitcoin higher
Before the election, US President Donald Trump said he intended to delay discussions on the stimulus until after the election. As a result, Democrats and Republicans struggled to come to a consensus on an agreement.
Biden̵7;s election sheds light on prospects for a stimulus package later this year. Democrats in the US Congress proposed a $ 2.2 trillion stimulus bill in October, but it received no Senate support.
The second stimulus could have a positive effect on Bitcoin as it significantly eases financial conditions in the US. It will also uplift the US economy and thus, stimulate investors’ appetite for high-risk assets.
Bitcoin awareness has grown from a risky asset to a safe haven and inflationary in recent months. Even so, there are still many instances where Bitcoin’s price moves in tandem with the stock market, so in the absence of interest in risky assets, Bitcoin’s price could still rise.
The US dollar increased
If the Biden administration approves the stimulus package, then the US dollar will appreciate. The euro zone, for example, has seen the euro rapidly appreciate after passing a major stimulus proposal.
The US dollar has been less effective against reserve currencies since March. As a result, it supports the recovery of gold, Bitcoin, and other alternative stores of value, as they are priced against the dollar.
Hence, it is likely that the second stimulus and improving initial investor confidence could have a positive effect on Bitcoin price. It is also worth noting that over time, a strengthening dollar could put additional selling pressure on Bitcoin and gold.
Stock market could recover now as elections are ‘settled’
Analysts also predict the US stock market will recover after confirming the election results.
While many analysts believe Biden’s tax and environmental policies could ultimately lead to stock market slumps, it’s highly likely that stocks may rally in the short term.
The stock market plummeted throughout August and September as analysts warned of a controversial election. Speculation surrounding the unlikely election results has prompted a sell-off of risky assets.
Instead, the fear that the election would drag on without an obvious winner boiled the market.
After the 2020 race is over, the market is less volatile and this could allow stocks to recover alongside other risky assets.
On the regulatory front, Compound Finance’s general adviser Jake Chervinsky said Biden has not expressed any public stance on cryptocurrencies. He wrote:
“President-elect Biden has not said anything publicly about his views on cryptocurrencies. As of now, it really isn’t a big enough deal to secure his attention. The next four years of US cryptocurrency policy depend on whom he appoints to key positions; We’ll know more as the transition happens. “
While the media announced that Joe Biden was the winner of the 2020 election, President Trump has yet to give in and many assume that Trump’s legal team will dispute the results and try to force the vote count. back in each battlefield state.
If this happens, fear and volatility can quickly re-enter the market and lead to a plunge in the prices of stocks and cryptocurrencies.