The US presidential election, combined with the currently weak US dollar, will serve as a key driver of the price of Bitcoin for the rest of 2020, an expert has said.
Nigel Green, CEO and founder of deVere Group, and long-term commentator on cryptocurrency, has said that the US election and current weakness of the currency will play a vital role in driving up the already strong Bitcoin price.
“Bitcoin is already one of the best-performing assets of the year, up around 70% year-to-date,” said Green.
“We can expect the world’s largest cryptocurrency to be further fuelled for the rest of 2020 by the U.S. presidential election and the weakness of the US dollar, which will serve as high-octane price drivers.”
The reason for this, he argues, is the level of uncertainty that is mounting surrounding global politics, in light of the pandemic.
“A US presidential election always stirs uncertainty – but 2020 is seen by many as particularly important as not only will whoever wins be the CEO of the world’s largest economy, they will be in that role as the world economically readjusts following the global fallout of coronavirus,” he said.
“As uncertainty heightens, investors will pile into safe-haven assets, in particular those not tied to any specific country, such as Bitcoin and gold.”
Bitcoin achieves digital gold status as US election heightens concerns
Bitcoin has increasingly been characterised as a safe-haven asset like gold, but Green argues that this year it will truly earn the title.
“Bitcoin is currently realising its reputation as a form of digital gold,” he said.
“Up to now, the precious metal has been perceived as the ultimate safe-haven asset, but Bitcoin – which shares its key characteristics of being a store of value and scarcity – could potentially knock gold from its long-held top spot as the world becomes driven by the tech revolution.
“Decentralised, non-sovereign, secure digital currencies, including Bitcoin, will become more attractive to investors as they will offer a hedge against turbulence in traditional markets.”
With much of the world now in recession, concerns over inflation as a result of financial responses are heightening, and here digital currencies offer a benefit over traditional fiat currencies.
“Printing of historic sums of helicopter money that’s pushed into the financial system has devalued the dollar and prompted inflation fears,” he said. “You can’t just print Bitcoin.”
Looking further afield, Green does not see the price of Bitcoin slumping any time soon.
“History will show that 2020 was a breakout year for Bitcoin,” he said.
“The greenback could be in for a short-term boost, but in the longer term there are expectations it’s on a downward trajectory and that it could ultimately lose its global reserves status – and this environment will provide a powerful boost for the price of Bitcoin.
“This explosive combination together with a growing number of millennials and Gen Z investors moving into digital assets could provide the perfect landscape for a multi-year bull market.”