How the US Election Could Revolutionize the Cryptocurrency Landscape

The dynamics of the political landscape largely affect economic activities. This assertion holds particular relevance when considering the impact of the 2020 US presidential election on the world of cryptocurrencies. Considering that cryptocurrencies like Bitcoin and Ethereum have been steadily rising, it’s worth examining the potential aftereffects of the election on cryptocurrencies. The convergence of US politics, finance, and evolving digital currencies could lead to a tectonic shift in both the financial and crypto sectors. To fully understand the potential impact, it’s essential to dissect these probabilities under the administrations of the two primary candidates: Donald Trump and Joe Biden. Under Donald Trump’s regime, Bitcoin has seen its ups and downs but largely managed to maintain a strong standing. His administration’s approach towards financial regulation had tremendous transformative effects on the crypto industry. In 2017, a single Bitcoin was close to reaching $20,000, a first in its decade-long existence. Although President Trump has shared a disliking for Bitcoin publicly, his administration did very little to impede its growth. On the contrary, the Trump administration’s laissez-faire attitude towards the Federal Reserve’s policies arguably fueled Bitcoin’s growth. On the other hand, Joe Biden, despite not sharing his clear standpoint on cryptocurrencies, is expected to adopt a different approach. Biden’s stance on regulation might spell significant changes for the crypto industry. He is projected to have a stricter outlook on financial regulations which might result in a more aggressive stance against cryptocurrencies. Despite this, some people are optimistic about a Biden administration’s impact on cryptocurrencies. They believe that his likely tougher regulatory stance may result in more established and crystal-clear regulations for digital assets, further legitimizing the crypto space. One scenario where the US election could potentially play a pivotal role in the world of cryptocurrency is the ongoing COVID-19 pandemic. The pandemic and resultant economic downturn have drastically alerted governments worldwide, making them more open to exploring digital currencies to boost economies. The eventual handling of the pandemic by either Trump or Biden could impact future policies regarding digital currencies. Also, possible changes in trade policies might influence cryptocurrency markets. Trump’s confrontation with China led to market volatility, indirectly swaying Bitcoin’s price. Conversely, if Biden revisits these policies, it might lead to market stabilization, affecting Bitcoin’s appeal as a hedge against volatility. Moreover, the impact of the election could also play out in US relationships with other countries. If either Trump’s America First or Biden’s multilateral approach dominates foreign policies, it can critically influence the dynamics of the global crypto industry. It’s important to note that fintech and blockchain developments are also rapidly advancing in the world, primarily in Asia. Thus, the eventual stance of the US would considerably shape these sector’s global standing relative to Asia, especially considering China’s aggressive approach towards cryptocurrency advancement. Lastly, mention must be made of the rising institutional interest in cryptocurrencies. Historical distrust by institutional entities is gradually shifting towards cautious optimism. A possible influence of the election on this shift cannot be dismissed. Policies may either accelerate adoption due to possible introduction of clear legal and regulatory frameworks or hamper growth due to possible stricter regulations and surveillance. While the US Election could indeed impact digital currencies, it’s worth mentioning that the inherent volatility and relative independence of cryptocurrency from traditional financial mechanisms would continue to influence its future direction. Thus, despite the importance of the election’s outcome, cryptocurrency’s fate will likely continue to hinge on its core characteristics, industry innovation, and broader global economic trends.