Bitcoin's recent price increase represents a complex interaction of political dynamics with economic factors—the upcoming U.S. presidential election becoming one of the most pivotal drivers.
Bitcoin's recent price increase represents a complex interaction of political dynamics with economic factors—the upcoming U.S. presidential election becoming one of the most pivotal drivers, according to Matthew Sigel, head of digital assets research at VanEck.
Sigel drew comparisons between current market conditions and trends evident during the 2020 election cycle. He noted that, in general, Bitcoin tends to plateau in the months leading into an election, only to surge significantly after the uncertainty of an election outcome has dissipated. Bitcoin’s recent movements have also coincided with increased betting odds favoring pro-crypto candidate Donald Trump.
According to Sigel, because the virtual currency inversely correlates with the U.S. dollar, periods of dollar weakness usually catalyze interest in Bitcoin as a better alternative store of value. Past changes in the M2 money supply have influenced Bitcoin's trajectory.
On the other hand, Sigel said possible future catalysts for Bitcoin’s appreciation involve global debt problems. The threat of credit downgrades in leading economies like the U.S. can drive investors to the digital currency as a hedge against traditional financial system risks.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
