Bitcoin’s price is poised for a positive trajectory regardless of the outcome of the upcoming United States presidential election, according to CK Zheng, the chief investment officer of ZX Squared Capital, a crypto hedge fund. Zheng’s insights highlight the historical patterns of Bitcoin’s performance during election years and its correlation with key economic factors.
Zheng noted that the impact of the April Bitcoin halving event has historically resulted in strong performances during the fourth quarter. This year, both major US presidential candidates have overlooked a significant issue—the escalating US debts and deficits—which Zheng believes will favor Bitcoin in the post-election landscape.
“As both Republican and Democratic parties do not appropriately address the ever-increasing US debts and deficits during this election, this will be very bullish for Bitcoin especially post the US election,” Zheng stated.
Bitcoin has historically thrived amid uncertainties surrounding past presidential elections, and Zheng anticipates a similar outcome this time around.
Bitcoin’s Fourth Quarter Performance
Data from CoinGlass indicates that Bitcoin has consistently experienced substantial gains in the fourth quarter, with rallies of over 50% occurring six times since 2013. The historical patterns suggest that years in which Bitcoin halving events take place often amplify these gains.
For example, during the 2020 halving, Bitcoin experienced a remarkable rally of 168% in the fourth quarter, coinciding with the last US presidential election. This pattern leads Zheng to expect that Bitcoin will reach a new all-time high either in Q4 or shortly thereafter.
Retail Interest and Media Attention
While the potential for price increases is notable, Samantha Yap, CEO and founder of the Web3 PR firm YAP, pointed out that the surges in Bitcoin’s price are often not the most captivating aspect of the market.
“What matters is the surge in retail interest across the crypto industry that follows,” Yap explained. “Media attention often follows retail interest, kicking off a whole media frenzy. The hope for the crypto and Web3 space during these moments is that there are more usable and accessible applications ready for newcomers to adopt.”
Yap’s observations suggest that while price movements are significant, the broader implications for the crypto ecosystem—particularly in attracting new users and fostering innovation—are equally important.
Zheng also highlighted the Federal Reserve’s recent “aggressive” 50 basis point interest-rate cut, which could serve as a bullish signal for Bitcoin and other risk-on assets, provided the US economy can achieve a “soft landing.” Central banks aim for a soft landing by adjusting interest rates sufficiently to prevent overheating and high inflation without triggering an economic downturn.
“If the Federal Reserve is successful, I expect Bitcoin’s price to be closely correlated with the NASDAQ,” Zheng added. This correlation could lead to more synchronized movements in Bitcoin’s price relative to traditional stock markets, further attracting institutional interest.
Reintroducing Liquidity into the Market
Leo Fan, a founder of the zero-knowledge proof generation and verification layer 1 project Cysic, mentioned that liquidity is gradually being reintroduced into the market. This trend may set the stage for stronger price movements in the months ahead.
“Bitcoin’s growing narrative as ‘digital gold’ and a hedge against macroeconomic instability is likely to attract more institutional capital, especially as traditional markets remain volatile,” Fan explained. This shift in perception underscores Bitcoin’s evolving role in the financial landscape.
As of now, Bitcoin is trading at approximately $64,400, reflecting a 2% decrease over the last 24 hours. Despite this slight decline, the overall sentiment remains optimistic about the cryptocurrency’s potential for growth, particularly in light of the upcoming economic and political developments.
| Date | Bitcoin Price | 24-Hour Change | Key Events |
|---|---|---|---|
| Sept. 17, 2023 | Below $58,000 | N/A | Previous price level before rally |
| Sept. 28, 2023 | Above $66,000 | +14% | Peak during recent rally |
| Sept. 30, 2023 | $64,400 | -2% | Ongoing market dynamics and expectations |
The outlook for Bitcoin remains bullish as it navigates the complexities of the upcoming US presidential election and the historical trends associated with its price movements. CK Zheng’s insights, along with the broader sentiment in the crypto market, suggest that external factors, such as political decisions and economic policies, will continue to play a significant role in shaping Bitcoin’s trajectory.
As Bitcoin prepares for what could be a record-breaking fourth quarter, investors and enthusiasts alike will be watching closely for developments that could influence the market. The interplay of retail interest, media attention, and institutional capital will likely define the future landscape of Bitcoin and the broader cryptocurrency ecosystem.
Featured image credit: DALL-E by ChatGPT
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