Is Donald Trump’s Re-Election Good for Bitcoin?

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As the Novem­ber pres­i­den­tial elec­tion approach­es in the Unit­ed States, spec­u­la­tion mounts about the poten­tial reper­cus­sions of Don­ald Trump’s re-elec­tion, par­tic­u­lar­ly con­cern­ing Bitcoin’s future. 

With an astute blend of finan­cial analy­sis and polit­i­cal insight, what could be the nuanced inter­play between a Trump vic­to­ry and the cryp­tocur­ren­cy market?

Donald Trump’s Potential Presidency Impact on Bitcoin

DWS Group, with its for­mi­da­ble $924.5 bil­lion in assets under man­age­ment, expressed appre­hen­sions regard­ing Don­ald Trump’s poten­tial re-elec­tion. Espe­cial­ly, regard­ing its impact on US Trea­sury bonds. 

The firm recalled the 2016 after­math when Trump’s win led to a sharp increase in 10-year gov­ern­ment bond yields. It hint­ed at infla­tion­ary pres­sures that could re-emerge with Trump at the helm. 

“[Don­ald Trump] has said he will raise the tar­iff on all imports to 10%, which is like­ly to be infla­tion­ary, and announced that he will retain the 2017 tax cuts, which are also fuel­ing growth and prices. This, togeth­er with the expe­ri­ences from Trump’s first term in office, in our opin­ion pro­vide suf­fi­cient argu­ments for high­er yields in the event of his elec­tion,” ana­lysts at DWS Group wrote.

More­over, Rick San­tel­li, an On-Air Edi­tor at CNBC Busi­ness News, cau­tioned about the high yield close for 30-year bonds in 2024, stand­ing at 4.41%. He high­light­ed that reach­ing this yield lev­el again could trig­ger a wave of sell­ing, even after pos­i­tive auc­tion outcomes.

“We talk about tail­ing. Tailing’s bad. This was on the screws, which is exact­ly the oppo­site. It stopped through by two basis points. I can’t tell you how aggres­sive that is. So 4.38 is the one issue mar­ket. This came in at 4.36. Low­er yield, high­er price, the gov­ern­ment sell­ing. High­er prices are good when you’re a sell­er. Now, two basis points is very large his­tor­i­cal­ly,” San­tel­li said. 

Read more: How to Pro­tect Your­self From Infla­tion Using Cryptocurrency

Trump’s eco­nom­ic strate­gies have his­tor­i­cal­ly trig­gered fluc­tu­a­tions in the mar­ket. His point­ed crit­i­cism of the Fed­er­al Reserve’s approach, cou­pled with his promise to replace Jerome Pow­ell as Chair, hints at sig­nif­i­cant changes in US mon­e­tary policy. 

This is a piv­otal con­sid­er­a­tion for investors, giv­en its poten­tial to pro­found­ly impact cur­ren­cy val­ues and, con­se­quent­ly, Bitcoin’s attrac­tive­ness as an invest­ment option. Fur­ther­more, poli­cies lead­ing to infla­tion and increased bond yields might enhance Bitcoin’s allure as a pro­tec­tive mea­sure against infla­tion­ary pressures.

It is worth not­ing that Trump’s crit­i­cal stance on Cen­tral Bank Dig­i­tal Cur­ren­cies (CBD­Cs) and arti­fi­cial intel­li­gence fur­ther improves the sce­nario. Trump oppos­es CBD­Cs, cit­ing threats to per­son­al finan­cial auton­o­my and increased gov­ern­ment sur­veil­lance. This could inad­ver­tent­ly bol­ster the case for decen­tral­ized cryp­tocur­ren­cies like Bitcoin.

Read more: Bit­coin Price Pre­dic­tion 2024/2025/2030

US Presidential Polls
US Pres­i­den­tial Polls. Source: New York Times

With Trump ahead in five of six swing states, the inter­con­nec­tion between his eco­nom­ic and polit­i­cal strate­gies and Bitcoin’s mar­ket posi­tion is intri­cate. Trump’s poli­cies might induce short-term mar­ket jit­ters, lead­ing to increased inter­est in Bit­coin as a safe haven. Still, the long-term impact is con­tin­gent upon broad­er eco­nom­ic out­comes, includ­ing infla­tion rates and the dollar’s strength.

Dis­claimer

In adher­ence to the Trust Project guide­lines, BeIn­Cryp­to is com­mit­ted to unbi­ased, trans­par­ent report­ing. This news arti­cle aims to pro­vide accu­rate, time­ly infor­ma­tion. How­ev­er, read­ers are advised to ver­i­fy facts inde­pen­dent­ly and con­sult with a pro­fes­sion­al before mak­ing any deci­sions based on this con­tent. Please note that our Terms and Con­di­tionsPri­va­cy Pol­i­cy, and Dis­claimers have been updated.

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