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The count continues and there is still no clear winner for the United States Presidency. How will this affect Bitcoin?

November 4, 2020

Unfortunately, what many of us feared is happening. Closed results, tension and uncertainty. Trump declared himself the winner early in the morning, although counting continues. Which means the United States Presidency is still in the air. Everything seems to indicate that despite losing a few seats, the Democrats will retain their control in the House of Representatives. And the Republicans will apparently continue to control the Senate.

These choices They were particularly difficult because of the high rate of early voting. That is, because of Covid-19, many voters have sent their votes by mail. It is important that many of these votes have not yet been counted. And it is estimated that many Democrats voted that way. Obviously, this could help candidate Joe Biden in some key states.

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The count continues and there is still no clear winner for the United States Presidency. How will this affect Bitcoin?
The count continues and there is still no clear winner for the United States Presidency. How will this affect Bitcoin?

Well the truth is that America is hanging by a thread with extremely narrow election results. And a Donald Trump making an “outrageous, unprecedented and false” statement (in the words of Joe Biden’s campaign manager Jen O’Malley Dillon). Which could indicate that we will have tension and uncertainty for a while. And given the political polarization in the United States right now, I wouldn’t be surprised if violence erupted on the streets. We hope not.

Everything seems to indicate that the Florida Latino vote favored Trump. Trump’s strategy of associating Biden with “radical socialism” appears to have helped win the Cuban and Venezuelan votes. However, the Latino vote in Arizona gave Joe Biden a tip and gave him a possible win in that key state.

Financial markets hate uncertainty. And this “declaration of war” by Donald Trump is a bad scenario for the markets. Challenging the results, bringing the matter to the Supreme Court, could create a climate of great volatility in all markets.

These elections were obviously complicated and everything seems to indicate that we are facing a long and drawn-out recount process that could take several days or more. There are already clear signs that many investors are looking for a safe haven for government bonds. And minutes after Trump played his sign to sing “Cheating” Wall Street futures turned on the negative side. European stocks also suffered a decline thanks to uncertainty. Nobody sees a long and drawn out battle in court positively. It is natural for investors to be defensive.

From the point of view of the markets, this is the worst-case scenario. In the case of Bitcoin, the daily chart shows behavior that is very similar to that of Wall Street futures. During yesterday the price remained positive but began to decline slightly from midnight. Due to the uncertainty, it is possible that the volatility in the markets will increase significantly. Indecision can lead to ups and downs. In other words, markets may be over-sensitive to the news.

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Much has been said about the pros and cons of both candidates when it comes to Bitcoin. In general, however, it can be said that the difference in economic matters is not as great as is thought. If Trump wins, we will have monetary incentives. If Biden wins, we will have monetary incentives too.

Republicans typically think that the economy needs few regulations, little taxes, and little government intervention to thrive. That is, the idea of ​​the free market. However, the free market does not solve all problems. In fact, Republicans are not as good for the economy as you might think. Interestingly, democratic administrations tend to generate faster economic growth, lower unemployment rates and stronger financial markets. This is not an opinion. It is an absolutely verifiable fact. If we compare economic performance in each administration over the past 50 years, we will find this clear pattern.

Of course, Joe Biden isn’t the radical Trump confronts us with. His political career shows us. And his economic plan is not radical either. The supposed radicalism of Joe Biden is an electoral strategy of the Laboratory on the part of the Donald Trump campaign. And I have to say that it worked perfectly with the Latinos in Florida (especially Cubans and Venezuelans). This supposed radicalism, however, is an unfounded accusation that doesn’t match Biden’s track record.

In fact, Biden’s plan for recovery is much more coherent than Trump’s plan. The plan includes investing in infrastructure, helping families, helping small businesses, and increasing the minimum wage. In this plan, the controls target the real economy for real growth. During the Trump administration, stimuli have mostly helped billionaires. Republicans are very generous towards billionaires, but when it comes to favoring the less privileged, the austerity dogma is always used to refuse to help.

It has been said that Wall Street does not view Biden positively. Well, nobody likes to pay taxes anymore. And the subject of regulations is always complicated. Despite the fact that this alleged rejection could have short-term implications, Wall Street knows full well that the long-term democratic plan would ultimately lead to strong economic growth.

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In summary, the uncertainty here is the most worrying. The worst scenario for the markets is closed results, tension and uncertainty. Just what we have right now. Some of us still remember the controversial 2000 presidential election between Al Gore and George Bush Jr. These elections were decided before the Supreme Court. Of course, today’s situation is more complicated due to the pandemic and economic crisis. Personally, I am concerned about possible outbreaks of violence on the streets. However, we hope that this situation does not arise.

What should I do? The best thing is to be patient and wait for the water to run its course again. It would be a mistake to panic. Sure, things can get complicated for a while. And we are sure to go through a period of volatility and tension. This can be a long, tedious, and complicated process. But it will eventually be resolved. We cannot lose optimism. That will happen.