The world is anxiously watching the impact of the US election on Bitcoin. Bitcoin hit a record high last week before suffering a sharp drop on Thursday. On the eve of a tense election between Kamala Harris and Donald Trump, investors are trying to decipher what this volatility means for the future of the iconic cryptocurrency. This unexpected connection between US political turmoil and Bitcoin prices is becoming a hot topic.
Bitcoin is facing the tremors of the traditional market
On Thursday, the price of Bitcoin dropped 2.8%, falling below $70,000 after nearly reaching a record of $73,737.
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This decline, while significant, seems partly related to the general trend in the market: technology stocks are also plummeting, with the Nasdaq and S&P 500 experiencing their worst day of the month.
Major companies like Microsoft and Meta have announced increased spending to meet AI demand, which has triggered a massive stock sell-off and brought instability to Bitcoin.
Why is there this correlation? In 2023, Bitcoin is moving in symbiosis with technology stocks, sharing between the nature of being a safe haven asset and its popularity among tech-savvy individuals.
This link reinforces the current phenomenon: as investors pull away from major technology stocks, Bitcoin will feel the impact. Thus, the dependency on this traditional market momentum raises questions about Bitcoin's true autonomy as a safe haven.
The impact of the election in the U.S. on cryptocurrency: a surprising factor causing volatility
The race for the White House adds another layer of volatility. With Donald Trump, a cryptocurrency-supporting candidate, facing off against Kamala Harris, who is seen as more restrictive toward cryptocurrency, the outcome of the election could directly affect the price of Bitcoin.
Trump's statements supporting Bitcoin production on American soil and his promise to ease regulations make him the preferred candidate among cryptocurrency investors.
On the other hand, Harris supports a tighter regulatory approach, reinforcing the idea that the election outcome could bring significant changes to the cryptocurrency market.
Analysts at JP Morgan further state that Trump's victory could provide a bullish momentum for Bitcoin. But this prediction is based on forecasts and assumptions: the actual market reaction will depend on many economic and geopolitical factors.
However, one thing is certain: cryptocurrency investors are closely watching the election in the U.S., aware that Bitcoin's price could fluctuate significantly depending on the outcome.
In summary, Bitcoin's volatility during election time reminds investors that, although Bitcoin is often a counterweight to traditional markets, it still is influenced by the global economic and political context. This instability is likely to persist until election results are announced, or even beyond, challenging investors' resilience and perhaps revealing new facets of the relationship between Bitcoin and U.S. politics.
