What can affect the price of Bitcoin before the end of the year?

Until the end of 2020, a little more than two months remain. During this time, several events can occur that ways to influence the price of bitcoin and crypto markets in general. Among them are the election of the President of the United States, the adoption by the American government of a new package of measures to support the economy and the development of the coronavirus pandemic, writes RBC Kripto.

US presidential election and price of Bitcoin

In 2020, the cryptocurrency market shows a high dependence on the stock market. In the spring, at the beginning of the crisis, the price of Bitcoin fell and rose after exchange indices. Closer to summer, this correlation is gone. But in September, digital assets fell again amid declining stock prices.

The prospects of the stock market largely depend on the results of the US presidential election, which is scheduled for November 3. Donald Trump is interested in the growth of the stock market and insists on the adoption of a new package of measures to support the economy. If the allocation of money is approved by Congress, this will most likely have a positive effect on the value of securities. In this case, stock indices and, possibly, cryptocurrencies will grow.

In the case of another US presidential candidate, Joe Biden, the situation is the opposite. He plans to increase the tax burden, including for large high-income companies. Such a policy may negatively affect the stock prices of companies, as their profits will decrease. This will affect stock indices accordingly and may negatively affect the value of cryptocurrencies.

The margin of votes in favor of Biden will leave the markets without positive. This point of view is held by the leading analyst of 8848 Invest Viktor Pershikov. He believes that losing Trump will increase the risks that new economic stimulus measures will not take place. Against this background, stock indices and the BTC exchange rate may fall significantly.

“Now the stock and cryptocurrency market is growing on the expectations of Donald Trump’s re-election as president of the United States, and, as a result, the approval of a new package of economic assistance, the money from which will flow to the stock and cryptocurrency markets. In this regard, Trump’s victory will support the market, “said Pershikov.

According to his forecasts, the price of Bitcoin by the end of the year may reach a level of $14 000. This scenario will become even more likely if the United States adopts a new package of measures to help the economy from the consequences of COVID-19.

New U.S. Support Package and Dollar Impairment

The dollar is considered one of the most reliable protective assets. However, in 2020, the American currency fell significantly. The DXY index, showing the strength of USD relative to the basket of national currencies, has decreased from 100 to 92.9 points since May, falling below 92.2 points at the moment.

The reason for the decline in the value of the dollar was US policy. The country’s government chose a policy of quantitative easing to support the economy in the crisis. An additional issue of currency is carried out, which leads to its impairment.

Due to the decline in the value of the dollar, demand for limited-issue assets increased. These include gold and bitcoin. This was one of the reasons why they invested in the first cryptocurrency:

• Billionaire and founder of the Tudor Investment hedge fund Paul Tudor Jones – $50 million;
• Square of Twitter founder Jack Dorsey – $50 million;
• MicroStrategy, manufacturer of analytical software – $425 million;
• Tahini’s restaurant chain is all its savings.

Now in the United States is discussing a new package of support measures. The state plans to allocate from $1.8 to $2.2 trillion.
If the dollar continues to get cheaper, this should lead to an increase in the price of Bitcoin. There is an inverse relationship between these assets, which was discovered in September by Amsterdam Stock Exchange analyst Michael van de Poppe. He said that if USD quotes continue to fall, it is possible to increase the BTC price to $20 000, and even to $100 000.

Intensifying the pandemic

During the coronavirus pandemic, a collapse occurred in the stock and commodity markets. Cryptocurrencies also became cheaper, but their value recovered faster. For example, the price of Bitcoin in March fell from $10 000 to $3800, but won back the fall by June, and today, October 22, set a new annual maximum at $13 200.

Increasing the pandemic is a positive factor for Bitcoin. This position is held by the head of the fintech company Exantech Denis Voskvitsov. He believes that, firstly, due to quarantine, the number of cashless transactions increases when it is necessary to contactlessly transfer a certain value over long distances.

Secondly, states “print” currency to combat the economic consequences of the crisis, which leads to its impairment. Against this background, fixed-issue assets are winning, including Bitcoin, whose offer cannot exceed 21 million coins.

What can affect the price of Bitcoin before the end of the year?

“Governments are actively supporting national economies through monetary incentives. It is likely that in the foreseeable future they will continue to distribute assistanдce to taxpayers. Monetary incentives are implemented through fresh borrowing, which leads to additional emissions. The issue, in turn, leads to a revaluation of assets. Assets that have a limited offer are in a more winning position”, – Voskvitsov explained.

Pershikov also called the pandemic a positive factor for cryptocurrencies. Continued COVID-19 amplification and second wave risks support the BTC course. Investors are fleeing risky assets to “quiet havens,” which include the digital asset market.

“The second wave will cause an increase in gold prices, as well as negatively affect the US dollar and stock markets, however, for the digital asset market, this is likely to be a plus,” suggested Pershikov.

In mid-October, Anthony Pompliano, co-founder of investment company Morgan Creek Digital, turned to customers with the forecast that in 2021 BTC will rise in price to at least $100 000. But if conditions are more favorable, the rate may rise to $250 000.