The imminent presidential elections in the United States may become a catalyst for the bitcoin (BTC) and cryptocurrency market that drives institutional demand. This is highlighted by a report from the Coinbase exchange, published on October 10, due to the bipartisan support for the ecosystem.
“Cryptocurrencies could see greater adoption by institutional investors looking for a way to trade election results, given the lack of regulatory clarity surrounding most non-bitcoin tokens,” stands out.
The exchange clarifies that its perspective on elections as a factor of impact on the market “It is quite optimistic from a regulatory perspective.” Both US presidential candidates have expressed pro-cryptocurrency sentiment at various points during their election campaign.
“We hope that this support will translate into a more favorable cryptocurrency environment in the future,” comments the exchange. This is despite the fact that Republican candidate Donald Trump has shown more interest in boosting the ecosystem than his Democratic opponent, Kamala Harris.
Coinbase anticipates that “any massive sell-off after the event will be offset by purchases resulting from institutional support due to the clear upside potential for this asset class.” Therefore, he predicts that the market reaction will be neutral to positive in the fourth quarter of 2024.
Meanwhile, the price of bitcoin remains in a corrective consolidation trend from the all-time high it registered seven months ago, as reported by CriptoNoticias.
Bitcoin could gain appeal as an investment ahead of the elections
“We expect the US elections to be the next big market catalyst for almost all assets, both traditional and digital,” highlights Coinbase. In his opinion, this could last until its completion on November 5 and even for a few more days or weeks, depending on how long it takes to reconcile the votes.
“The endogenous factors of cryptocurrencies are likely to take a backseat until then,” he says. In tune, it indicates that the influence of the recent rate cut in the United States is beginning to diminish, even with the upward surprises in labor data, along with the effect of China’s extraordinary fiscal and monetary stimulus.
Therefore, the exchange projects that the impact on liquidity of the aforementioned measures may take months. So, looking to the nearest future, he predicts that Regulatory expectations around elections motivate institutional demand of bitcoin and cryptocurrencies.