Will the U.S. Election Impact Bitcoin’s Price?

The upcoming United States presidential election could positively impact Bitcoin’s price, regardless of who takes office, according to CK Zheng, Chief Investment Officer at ZX Squared Capital.

Zheng notes that the U.S. presidential candidates have largely overlooked a critical issue: the growing national debt and deficit. “Both the Republican and Democratic parties fail to adequately address the rising U.S. debts and deficits during this election, which will be very bullish for Bitcoin, especially post-election,” Zheng noted.

Historically, Bitcoin has thrived during periods of economic uncertainty, including previous U.S. presidential elections, and Zheng believes this trend will continue. Additionally, Bitcoin’s fourth-quarter performance has been notably strong in past years, with CoinGlass data revealing that Bitcoin has surged over 50% six times since 2013 in Q4. This momentum often gets an extra boost in years following a Bitcoin halving event.

The upcoming 2024 election coincides with Bitcoin’s halving, expected to take place in April. During the last halving in 2020, Bitcoin’s price surged by 168% in the fourth quarter, which also happened to be an election year. Zheng predicts a similar outcome this year, expecting Bitcoin to reach new all-time highs in Q4 or shortly afterward.

However, Samantha Yap, CEO and founder of Web3 PR firm YAP, emphasized that while Bitcoin rallies are exciting, the more significant aspect is the increase in retail interest. “What matters is the surge in retail interest across the crypto industry that follows,” Yap said. Media attention tends to follow retail interest, often creating a buzz around the crypto and Web3 space. The hope is that this period of heightened interest will lead to more accessible and practical applications for new users to adopt.

Zheng also pointed to the Federal Reserve’s aggressive monetary policy as a potential boost for Bitcoin. The Federal Reserve’s recent 50 basis point interest-rate cut could be bullish for Bitcoin and other risk-on assets if the U.S. economy achieves a “soft landing.” A soft landing refers to central banks managing interest rates to curb inflation without causing an economic downturn. If successful, Zheng expects Bitcoin’s price to move in tandem with the NASDAQ, reflecting its growing status as a speculative, risk-on asset.

In addition, Leo Fan, founder of Cysic, a Layer 1 blockchain specializing in zero-knowledge proof generation, noted that liquidity is slowly returning to the market. “This could set the stage for stronger price movements in the months ahead,” Fan said. He also emphasized Bitcoin’s evolving narrative as “digital gold” and a hedge against macroeconomic instability, which is increasingly attracting institutional capital as traditional markets remain volatile.

As the U.S. election approaches, the convergence of economic policy, rising debt, and Bitcoin’s halving event may align to create a favorable environment for Bitcoin to thrive. While uncertainty looms over the broader financial markets, Bitcoin’s position as a hedge against economic instability continues to attract attention from both retail and institutional investors.