Bitcoin On Election Day: What The Pros Say To Expect

Cryptocurrency markets entered the week with notable volatility as Election Day approaches, with Bitcoin and other digital assets fluctuating amid the uncertainty. Analysts anticipate a rally in Bitcoin regardless of the outcome, but caution that there could be short-term fluctuations. Joel Kruger, market strategist at LMAX Group, sees a supportive landscape for crypto in 2024, noting, "We continue to see plenty of support around crypto assets in 2024, including what promises to be a friendly incoming U.S. administration, whoever it might be."

With both major political parties showing a willingness to embrace the burgeoning crypto industry, the potential for longer-term support is significant. Kruger noted that “both parties have recognized the important innovation in the space,” emphasizing a promising outlook for Bitcoin even amid election-related market jitters. He attributes current uncertainties to the high-stakes nature of the U.S. election, which has historically influenced market trends, though he suggests that volatility may ease following the election’s resolution.

Bitcoin’s current positioning, bolstered by steady demand and recent market developments, has industry watchers optimistic. As Kruger explains, these factors could fuel an upward trajectory for Bitcoin in the months following the election.

Election Outcomes and Predicted Bitcoin Trends
Should former President Donald Trump secure victory, analysts at Bernstein project an initial jump in Bitcoin’s value, with estimates suggesting it could hit between $80,000 and $90,000 by Inauguration Day in January. Conversely, a win for Kamala Harris might briefly depress Bitcoin values, potentially dropping to $50,000 before stabilizing. Bernstein analysts attribute this to differing levels of support within each candidate’s policy framework and the broader market’s reaction to changes in leadership.

Beyond the immediate outcomes, Bernstein’s team envisions Bitcoin reaching unprecedented heights by 2025. In a recent research note obtained by The Block, they pointed to $200,000 as a potential price target, citing increased demand for hard assets amid record debt levels, ongoing monetary expansion, and the success of spot Bitcoin ETFs as key drivers of this outlook.

For the near term, both camps show signs of crypto advocacy, with Trump maintaining a “decidedly more crypto-friendly” stance, as noted by Kruger. This positioning has influenced Harris’s campaign to adopt a similar approach, likely boosting crypto sentiment in the lead-up to the election. Matthew Sigel, head of digital assets research at VanEck, expressed optimism for a post-election rally, recalling a similar surge four years ago. “We think once there is a clear winner, Bitcoin will rally strongly,” Sigel shared, adding that Ethereum, Solana, and other altcoins may perform better under a Trump administration.

Historical Trends: Bitcoin and U.S. Elections
James Van Straten, senior analyst at CoinDesk, highlighted the historical connection between U.S. elections and Bitcoin price movements. In 2012, Bitcoin’s price surged 12,000% following the election, and it saw a 3,600% increase in the year after the 2016 election.

However, 2020 showed a more modest 478% gain, suggesting that while election cycles have previously acted as catalysts, returns are gradually diminishing over time. Extending these trends, Van Straten anticipates a post-election rally of approximately 47.8% in 2025, estimating Bitcoin’s price at around $103,500 in Q4 of that year.

As the crypto market matures, some analysts contend that the unprecedented price leaps seen in earlier years may become less common. Nevertheless, Election Day remains a significant event in Bitcoin’s price trajectory, underscoring the role of geopolitical factors in shaping the cryptocurrency’s value.

Bitcoin’s Recent Market Activity and Broader Crypto Impacts
Bitcoin, which has rallied over 61% this year, experienced a slight decline on Monday, dropping below $68,000. This movement follows a late October peak above $73,500, coming close to its all-time high of $73,798 in March. Despite this volatility, Bitcoin’s overall upward trend in 2024 reflects a bullish sentiment among investors and analysts alike.

Ethereum, the second-largest cryptocurrency, also pulled back from a high of $2,750 in October, trading below $2,450 on Monday. With an annual increase of around 6%, Ethereum’s growth has been more subdued compared to Bitcoin’s. However, it remains one of the most-watched assets in the market, particularly among institutional investors drawn to its smart contract capabilities.

Crypto exchange Coinbase (COIN) saw its stock rise by 1.9% on Monday, rebounding slightly after a nearly 11% drop last week following disappointing Q3 earnings. Bitcoin mining companies, including Marathon Digital (MARA), Iren (IREN), and Bit Digital (BTBT), experienced declines in tandem with Bitcoin’s price movement, as did a range of spot Bitcoin ETFs, which collectively dropped 2.3% on Monday.

Analysts caution that these price fluctuations may persist as the election outcome nears, potentially impacting the wider crypto market. However, the favorable policy environment anticipated under both candidates, alongside the demand for hard assets, underscores the resilient outlook for Bitcoin and other digital assets. The cryptocurrency market’s maturation suggests that investors are increasingly prepared for periods of volatility, viewing them as opportunities within an asset class that continues to gain mainstream appeal.

https://www.investors.com/news/bitcoin-price-outlook-2024-us-election-trump-kamala-harris/