The pandemic-fueled market crash of March didn’t spare bitcoin or the rest of the crypto market, but in retrospect, it could be considered a good thing. The crash created a turning point, which later accelerated Bitcoin’s adoption, establishing it as an uncorrelated asset, with recognition even from top critics like gold investor Peter Schiff.
Earlier in 2020, many experts, including Fundstrat’s Founder Tom Lee, had marked 2020 as bullish for Bitcoin even before the Black Thursday event which slowed down the market’s movement significantly. Speaking to crypto experts at the Blockchain Economy 2020, event in Istanbul Turkey, Lee said:
“I think there’s even a chance that Bitcoin could end, or touch the level of, somewhere around $30,000 this year.”
Now that the third halving event basically brought Bitcoin back on track, everyone is sure Bitcoin is bullish in 2020, and it is only a matter of when, but they seem to be leaving out one important element; the upcoming US elections.
Bitcoin and US Politics Have History
Bitcoin, according to Tom Lee’s remarks, was 2019’s best-performing asset, beating S&P’s 500 25-years run as the top asset.
In 2016, Bitcoin went up to $950, after the ascendancy of President Trump, driven by high speculation that the Federal Reserve would up interest rates on the dollar. The crypto community at the time was also hoping that as a businessman, Trump would endorse Bitcoin.
Tom Lee outlined several reasons why 2020 will be bullish for Bitcoin. He stated that this year, there’ll be less pressure on bitcoin, as much of the attention will be focused on politics.
That prediction, while logical, might be null avoid now, considering the current state of the US due to the Coronavirus lockdown measures, monetary and fiscal policies in place, and the countrywide unrest and protests.
As of April, the national debt had exceeded $24.6 trillion and in June, the total debt stood at $55.9 trillion, with millions of small businesses closed permanently, unable to recover.
All these factors are bound to affect Bitcoin’s price movement since the US is home to the largest number of crypto adopters with a late 2019 survey showing that 36.5 million Americans have invested in cryptocurrencies.
Additionally, Coinbase reported a hike in Bitcoin buys worth $1200 right at the time when the government was issuing stimulus checks. Meanwhile, many crypto startups are preparing for mass adoption, with products and services seemingly targeting potential adopters, as is evident from upcoming crypto marketing tactics.
Trump Administration’s Current Position on Bitcoin Is Unfavorable
Contrary to earlier predictions of focus away from Bitcoin, President Trump has been consistently mentioning Bitcoin in key moments, raising concerns as to whether he intends to make it an integral part of his re-election campaign.
In mid-2019, Trump wrote on Twitter:
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money and whose value is highly volatile and based on thin air.”
In March this year, however, Trump appeared to vaguely ‘promote’ Bitcoin, after the Federal Reserve injected 6.2 Trillion more into the economy. Trump’s latest mention of bitcoin seems to have returned his distaste after he was reportedly quoted telling the Treasury Secretary Steven Mnuchin to “go after Bitcoin.”
Meanwhile, the crypto community is still waiting on FinCEN to roll out new requirements for Cryptocurrencies, according to a February directive by Trump’s administration. Mnuchin stated:
“We want to make sure that technology moves forward but on the other hand, we want to make sure that cryptocurrencies aren’t used as the equivalent of old Swiss secret number bank accounts.”