- In view of the uncertainty caused by the US elections in early November, the Bitcoin price could remain in a range between USD 10,000 and 11,100 for the time being.
- According to Alex Krüger, an election victory by Donald Trump could “lead to an even stronger bull run”.
Since the crash at the beginning of September, when the price plummeted from USD 12,000 to briefly below USD 10,000, Bitcoin has been trading in a price range of USD 10,000 to USD 11,100 and is currently not finding a clear trend. One reason for this, which is cited by numerous experts, is the upcoming US election in November. Depending on the outcome of the election, the United States could head in different monetary policy directions. This uncertainty could currently paralyze investors across all asset classes.
The obese macro-analyst Alex Krüger also expressed himself in this sense yesterday. He fears that an election of Joe Biden could lead to tax increases and more regulations. Both factors could increase the pressure on the economy and the stock market. In addition, Biden, together with the US Federal Reserve, could continue to pursue a loose monetary policy and thus send the USD dollar further downhill. This could benefit precious and base metals and Bitcoin in particular, which are valued against the dollar, said Krüger:
Base case elections scenario
#1 Biden win
#2 Contested election
#1 Reduced risk exposure until elections
#2 Load up on panics
#3 Ride bull-market as it resumes post-elections
Multi-asset views on a Democratic clean sweep
– Weak dollar
– Precious metals take off again
– Silver boosted by solar panel demand
– Base metals take off, copper in particular
– Crude oil suffers
– Bitcoin moons
A re-election of Donald Trump could mean a different, if even more bullish, scenario. According to Kruger, a Trump victory “would require a few adjustments, yet lead to an even stronger bull-run. Win-win”.A senior Credit Suisse executive shares Krüger’s view.
According to Suresh Tantia, the stock market could experience a 5% setback after the elections. In addition, he stressed that the fiscal policy of the FED had not had any noticeable effect, neither on the stock market nor on the US dollar. The continuous trend of a falling dollar and a stagnating stock market could boost sentiment around Bitcoin and gold in the long run.
An even greater influence on Bitcoin than the US elections
However, as Krüger also noted, a further economic stimulus package could have an even greater impact on the Bitcoin price. According to the expert, it is rather unlikely that another package will be passed before the elections. Instead, he expects it to be passed in the first half of 2021.
According to Krüger, this could have an even greater macroeconomic impact on Bitcoin and gold. Since the adoption of the economic stimulus package in April, Bitcoin has risen from around USD 6,000 to up to USD 12,500. A second stimulus package would ease the considerable pressure on all asset classes and have a positive impact on Bitcoin, said Krüger:
Either way, odds are very high the Fed will come to the “rescue” in its mid-December FOMC, delivering further monetary easing. If a large fiscal stimulus were to pass pre-election (which I don’t expect) the election itself would likely move to second place as far as risk assets go. Fiscal talks have driven spoos +5% in a week, yet a package is far from fully priced in. It would be a buy the news event.