Although the price of bitcoin (BTC) started the week rising to more than $66,000 (USD), there are factors that can affect its performance.
The digital currency is in a period of consolidation seven months ago since the historical record it set at USD 73,700. Therefore, beyond its recent strength, It is key that the global environment is beneficial for your demand. Otherwise, you might continue to be stuck within this phase.
At present, there are mainly 3 potential risks in the global panorama that could slow down the rise in the price of bitcoin, as detailed below.
Kamala Harris’ victory
In three weeks, precisely on November 5, the citizens of the United States will elect their next president. This is something that affects expectations about the bitcoin and cryptocurrency market in the main economic power.
If the Democratic leader, Kamala Harris, wins, the impact on bitcoin could be bearish in the short term or, at least, slow its rise. The reason is that His support for the digital asset industry has been moderate, unlike his opponent Donald Trump.. Furthermore, this seems motivated more by political reasons than genuine interest.
In this sense, in the event of a Harris victory, the bitcoin market could react with uncertainty and demotivation. On the other hand, if the Republican candidate, Trump, wins, the response could be upward, considering his intention to maintain national reserves in the digital currency and turn the country into a center for the cryptocurrency industry.
According to bets on the Polymarket platform, 53% of operations expect Trump to win, while the rest expect Harris. Although, as seen below, expectations were the opposite weeks ago, which indicates that there is no great clarity about who will win the presidential dispute.
Escalation of war conflicts
Rising international tensions in critical areas such as the Middle East and the conflict between Russia and Ukraine also pose a threat to bitcoin. History shows that, during situations of war or global uncertainty, Investors prefer to reduce risks and turn to more traditional assetslike gold or Treasury bonds.
Although bitcoin has been compared to “digital gold”, it is still perceived by investors as a risk asset due to its high volatility, especially in uncertain scenarios. Consequently, unless such a narrative is strengthened, there could be a decline in demand for the digital currency if the current geopolitical conflicts escalate.
Without going any further, this has been reflected in Iran’s recent attack on Israel at the beginning of October, which caused global financial markets to decline. Not only company stocks were affected by this, but also bitcoin, as the following graph shows.
global recession
With the recent higher-than-expected inflation data in the United States and the slowdown in the labor market, the possibility of a recession is still on the table. This is despite the current growth in the US and Chinese stock markets.
Therefore, As more data emerges that validate an economic cooling scenario, risk demand could decrease. Consequently, this could slow the rise of bitcoin, unless its valuation grows due to its shortage of supply and decentralized mining, attributes that make it look like digital gold.
The “digital gold” narrative that has accompanied bitcoin could protect its price if investors view it as a store of value. However, this vision is not yet fully consolidated. Therefore, the key to its immediate future will be the evolution of economic data and how its role is perceived in a possible global crisis.
