12:48Expect market regulation ‘avalanche’ if Biden beats Trump — Mulvaney
Former Trump chief of staff Mick Mulvaney foresees an “avalanche” of regulations if Biden wins the election, what’s this mean for Bitcoin price?
Former Trump chief of staff Mick Mulvaney says a Joe Biden presidency would cause an “avalanche” of regulations. Some economists have also voiced concerns that the Biden administration would lead to a stock market pullback.
This has led many crypto analysts to ponder what impact a strong stock market correction would have on the price of Bitcoin (BTC).
During an interview on CNBC’s Squawk Box, Mulvaney said Biden would push many regulations in a short period. He stated:
Data from Skew shows Bitcoin has seen more correlation with gold than stocks in recent months. Hence, an argument could be made that a slowing stock market could actually buoy Bitcoin’s sentiment.
The correlation between Bitcoin and gold. Source: Skew
Economists are pessimistic too
Other studies show that a Biden presidency might have minimal impact on the trend of the stock market.
The WSJ says historical data indicates the election of Biden could still allow the stock market to net an average 10% annual return. Ed Finn, an opinion contributor to the WSJ, wrote:
However, there are two possible scenarios, in which a drop in stocks is likely to impact Bitcoin as well.
First, if it causes the sentiment around safe-haven assets like gold to improve, it might raise the chances of a BTC rally.
Secondly, a slump in stocks could take gold and Bitcoin with it as it did in March. If the latter scenario plays out, most assets with the exception of U.S. Treasuries are likely to decline.
What’s the most likely outcome for Bitcoin price?
Since the sentiment around the Biden presidency remains mixed, there is a high probability that it would have no meaningful impact on BTC.
When Bitcoin enters 2021, it faces a post-halving cycle as it did in 2017. Back in 2016, it took around 17 months for BTC to achieve a new peak at $20,000. If BTC follows a similar cycle, that puts the fourth quarter of 2021 as the possible next peak for the world’s leading cryptocurrency.
The weekly price chart of Bitcoin. Source: Tradingview.com
In the short-term, strategists predict a sell-off after a Biden election. Boston College associate dean for strategy Aleksandar Tomic said:
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