Is Donald Trump’s re-election good for Bitcoin?
As the November presidential election approaches in the United States, speculation is mounting about the potential outcome of Donald Trump's re-election, particularly regarding the future of Bitcoin.
With financial analysis and political insight, what could be the difference between Trump's victory and the cryptocurrency market?
The impact of Donald Trump's presidency on Bitcoin
DWS Group, with its staggering $924.5 billion in assets under management, has expressed concern over Donald Trump's re-election. Especially regarding the impact on US Treasury bonds.
It was a stark reminder of the aftermath of 2016, when Trump's victory led to a sharp spike in 10-year government bond yields. He hinted at a possible resurgence with Trump on inflation.
“[Donald Trump] He said he would raise tariffs to 10% on all imports, which are expected to be inflationary, and announced that he would continue the 2017 tax cuts. This, combined with the experiences of Trump's first term in office, provides sufficient arguments for a high yield during the election, in our opinion,” wrote DWS Group analysts.
Additionally, Rick Santelli, on-air editor at CNBC Business News, warned of an expected high yield for 30-year bonds in 2024 of 4.41%. He pointed out that reaching this level of production again would trigger a wave of sales even after positive auction results.
“We talk about tails. Tails are bad. This was on the spikes, which is exactly the opposite. It stopped two bases. I can't tell you how aggressive it is. So 4.38 is a one-issue market. It entered at 4.36. Low yields, high prices, government selling.” “When you're a seller, high prices are good. Now, two fundamentals are historically huge,” Santelli said.
Read more: How to protect yourself from inflation using cryptocurrency
Trump's economic strategies have historically triggered market volatility. His criticism of the Federal Reserve's approach, coupled with his promise to replace Jerome Powell as chairman, signaled significant changes in US monetary policy.
This is an important consideration for investors, given its potential to have a profound impact on exchange rates and thus the attractiveness of Bitcoin as an investment option. In addition, policies that help increase inflation and bond yields may increase demand for Bitcoin as a hedge against inflation.
It is worth noting that Trump's critical stance on Central Bank Digital Currencies (CBDCs) and Artificial Intelligence will further exacerbate the situation. Trump opposes CBDCs, citing threats to personal financial autonomy and increased government surveillance. This may inadvertently strengthen the case for decentralized cryptocurrencies like Bitcoin.
Read more: Bitcoin price prediction for 2024/2025/2030
With Trump ahead in five of six swing states, the correlation between his economic and political strategies and the Bitcoin marketplace is complex. Trump's policies could create short-term market turmoil, increasing demand for Bitcoin as a safe haven. Still, the longer-term impact is through broader economic outcomes, including inflation and dollar strength.
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