The outcome of next monthâs U.S. presidential election may not matter much for bitcoinâs price: Economic stimulus in the trillions of dollars is likely no matter who wins, bolstering the largest cryptocurrencyâs appeal as a hedge against inflation.Â
President Donald Trump over the past week has reversed his opposition to a new government-spending bill following Aprilâs $2 trillion coronavirus-aid package. He signaled his eagerness to strike a deal with leaders of the opposition Democratic party, who have proposed a $2.2 trillion stimulus bill. According to Axios, he told senior lawmakers in his own Republican party that he wants âa big deal.âÂ
If Trump wins in November, heâs likely to continue supporting stimulus spending or easy monetary policy from the Federal Reserve, given his four-year track record of jawboning the U.S. central bank to cut interest rates whenever signs of weakness appear, while boasting about U.S. jobs growth and stock market increases. He also could push for a new round of tax cuts.Â
Trumpâs Democratic challenger, former Vice President Joe Biden, has already rolled out his own $5.4 trillion agenda that includes increased budget allocations for education, housing, health care, paid leave and fixing crumbling infrastructure, according to the Wall Street Journal. The Biden campaign has pledged to cancel a substantial portion of Americansâ $1.5 trillion in federal student debt. Â
Such expenses would come on top of what already seems like an unending sea of red ink: The U.S. governmentâs budget deficit for the 2020 fiscal year tripled to $3.1 trillion. And economists say the Federal Reserve is likely to keep printing money in coming years to help finance the budget gap.Â
âBecause the economyâs hands are tied and policymakersâ hands are tied, the wiggle room that any party in power is going to have is limited,â said Chris Wallis, chief investment officer of Vaughan Nelson Investment Management, a division of the French financial firm Natixis, told First Mover in a Zoom interview. âThereâs no atheists in a foxhole. Nobody is going to worry about deficits.â
Wall Street analysts have debated in recent weeks whether a Trump or Biden victory would be better for stocks. Whatâs good for bitcoin might be easier to pinpoint, since most digital-asset market analysts say the Federal Reserveâs $3 trillion of freshly printed money this year has helped to push up prices for the largest cryptocurrency.Â
The upshot? For voters, itâs a choice between Trump and Biden. But bitcoin might be a winner either way.  Â
Read More:Â Bitcoiners Have Trillions and Trillions of Reasons to Ignore US Election
Bitcoin bulls are taking a breather, having powered gains for the sixth consecutive day on Monday. Thatâs the longest daily winning run since August 2019.
The momentum is likely to continue as the growing institutional participation highlighted by the payment company Squareâs recent $50 million investment in bitcoin has bolstered investor confidence in the cryptocurrencyâs long-term prospects.
Technical charts have turned bullish with the cryptocurrencyâs convincing move above the Sept. 18 high of $11,200.
Last, open interest in futures listed on major exchanges across the globe has increased by 20% alongside a rally in prices. Futures trading volume also doubled to $14 billion on Monday.
A rise in open interest and volumes alongside an increase in prices is said to validate the uptrend. In other words, the latest bullish move has legs.
âThe probability of bitcoin rising to $14,000 from current levels is stronger than the odds of a decline to $10,500,â Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG told CoinDesk in a Twitter chat.
â Omkar Godbole
Read More: Bitcoin Eyes $12K After 6-Day Streak of Gains
Ether (ETH): Cryptocurrency rallies after Grayscale (owned by CoinDesk parent Digital Currency Group) announces that Ethereum Trust has become SEC reporting company. Â
Zcash (ZEC):Â Tokenâs developer, Electric Coin Company, shifts to non-profit status following stockholder vote.
Dai (DAI): MakerDAOâs gambit to restore DeFi stablecoinâs value to $1 peg appears to have worked.Â
Ethereum Classic (ETC): Developers on frequently-targeted blockchain attempts âmodified exponential subjective scoringâ as latest solution for warding off 51% attacks. Â
Filecoin (FIL): Trading in decentralized file-storage serviceâs tokens begins on Kraken Oct. 15, exchange says. Â
Harvard research paper co-authored by former Treasury Secretary Larry Summers estimates that costs of lingering health effects could double economic toll of coronavirus over next decade to $16T (Journal of the American Medical Association)Â Chinese exports rose for the fourth straight month in September while imports also rose sharply, signaling robust bounce-back from Covid crunch (Bloomberg)
India has âweak economic outlook,â Scotiabank says (CNBC)