on the crypto
The outcome of next month's US presidential election may not matter much for bitcoin's price: trillions of dollars worth of economic aid is likely to be granted regardless of who wins, confirming the position of the largest cryptocurrency as a hedge against. inflation.
The challenge between Trump and Biden on the economy
If Trump wins in November, he will likely continue to support spending on economic stimuli or a soft monetary policy from the Federal Reserve. It could also push for a new round of tax cuts.
Meanwhile, Trump's Democratic challenger, former Vice President Joe Biden, has already launched his $ 5,4 trillion agenda that includes increased budget allocations for education, housing, health care, paid vacation and the repair of dilapidated infrastructure, according to the Wall Street Journal.
Biden's campaign pledged to cancel a substantial portion of Americans' $ 1,5 trillion federal student debt. Those expenses would add to what is already a never-ending sea of red ink: the U.S. government's budget deficit for fiscal 2020 has tripled to $ 3,1 trillion.
"The market doesn't really care who wins"
Wall Street analysts have been discussing in recent weeks what effect a Trump or Biden win would have on stocks. But what's good for bitcoin may be easier to spot, as most digital asset market analysts say the Federal Reserve's $ 3 trillion in newly printed money this year helped drive prices up. of the largest cryptocurrency.
Bitcoin has grown 63% since the beginning of the year, compared to 9,4% in the S&P 500 index. "It almost seems that the market doesn't really care who wins," Mati Greenspan, founder of the Quantum Economics research company. “Anything that interests the Investors it is the stimulus, which both parties seem willing to provide amply ”.
Who will win?
There is still a long way to go before the economy recovers. About 12,6 million Americans were unemployed at the end of September, more than double the number of earlier this year, before the pandemic.
And now some experts are predicting a new wave of coronavirus cases, which could break consumer confidence or lead to new containment measures that could cut production.
Any spending to bring the economy out of stagnation adds to the ever-growing list of investments needed to address pressing concerns over environmental and social problems.
Federal Reserve Chairman Jerome Powell made no secret of his position that the government needs to increase spending to fuel the recovery from the recession. In a speech last week, Powell said that without further aid, households and businesses would experience an increase in "insolvencies", which could damage "the productive capacity of the economy". The result? For voters, it's a choice between Trump and Biden. But bitcoin could be a winner either way.
