Bitcoin surges after US Election

Bitcoin surpasses $75,000, but will it continue to rise?

I recently posted a YouTube video on how the recent election has impacted Bitcoin`s recent surge and you can check it out here:

The outcome of the recent U.S. election is likely to have significant implications for Bitcoin and the broader cryptocurrency landscape. Both the direct approach of the new administration toward digital assets and the larger economic policies they implement will shape the environment in which Bitcoin operates, potentially affecting its price, regulation, and adoption rates. Here’s a closer look at some of the key factors to watch.

1. Regulatory Landscape

The new administration’s stance on cryptocurrency regulation will be a critical factor for Bitcoin. In recent years, the U.S. government has shown a growing interest in establishing clearer regulatory frameworks for digital assets. However, the approach has often been cautious, with an emphasis on consumer protection, tax compliance, and financial stability.

The election results may bring new leadership within agencies like the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Treasury Department. If the administration opts for a more crypto-friendly regulatory approach, this could spur innovation and make the U.S. a more attractive hub for crypto businesses. On the other hand, tighter regulations could add pressure to Bitcoin markets, potentially discouraging institutional adoption and complicating compliance for individuals and businesses.

2. Monetary Policy and Economic Stimulus

Monetary policy has always played an indirect yet powerful role in Bitcoin’s appeal and adoption. In recent years, the U.S. has pursued a policy of low-interest rates and substantial economic stimulus, which many view as contributing factors to rising inflation. This has driven some investors toward Bitcoin, which is often seen as an inflation hedge or a “store of value” similar to gold.

If the new administration continues to prioritize economic stimulus or keeps interest rates low, it could further fuel inflation concerns, which may, in turn, attract more investors to Bitcoin as a safe haven. Alternatively, a shift toward tightening monetary policy and controlling inflation could lessen Bitcoin’s appeal as a hedge, impacting its demand and possibly its price.

3. Impact on Institutional Investment

Over the past few years, institutional interest in Bitcoin has been steadily increasing, with major financial firms offering Bitcoin products and more companies adding Bitcoin to their balance sheets. The election outcome may influence the regulatory clarity surrounding Bitcoin and other cryptocurrencies, which could, in turn, affect how institutions view these assets.

If the administration moves toward establishing favorable crypto policies, it could encourage more institutional players to enter the Bitcoin market. Additionally, if economic policies lead to continued volatility in traditional markets, Bitcoin’s appeal as a non-correlated asset could drive further institutional adoption.

4. Taxation Policies

Tax policies are another area that could affect Bitcoin investors. The U.S. government’s approach to capital gains taxes, specifically around cryptocurrency, can have a substantial impact on the incentives for both retail and institutional investors. If tax rates on cryptocurrency gains were to increase, this might discourage some investors, especially those interested in short-term gains.

Conversely, if policies around capital gains tax remain unchanged or become more favorable, this could encourage long-term investment in Bitcoin, contributing to price stability and potentially promoting its role as a long-term asset.

Conclusion

While it’s challenging to predict the precise impact of the election on Bitcoin, a few trends are clear: regulation, monetary policy, institutional support, and tax treatment will all play crucial roles in shaping Bitcoin’s future in the U.S. market. Whether these dynamics result in Bitcoin becoming a more mainstream asset or facing more obstacles, the U.S. election will undoubtedly be a pivotal factor in the cryptocurrency’s evolving landscape.

Some housekeeping notes:

I am going back to the old name for this newsletter, which was, “The Howie Newsletter”, at the start. I think it`s more genuine and reflects the direction of the Newsletter rather than a broad generic name which everyone and their Dad knows…. thanks for stopping by!