In 2016, a Bitcoin investor who bought $1,000 worth of Bitcoin on Election Day would have seen his investment grow to more than $10,000 just one year later. This is a dramatic example of how the world of crypto relates to elections, and a hint at what's to come this election season.
What impact will the next president have on crypto prices? Things are far from certain, and predicting the market by skimming the chart-based tea leaves is a dangerous method.
Still, some factors remain predictable. One is people's general reaction to a presidential candidate winning the White House. The other is the long-term trajectory of Bitcoin and Ethereum. What does history say about Bitcoin and Ethereum prices after the election?
Bitcoin and Ethereum usually rise
The market capitalization of major cryptocurrencies typically rises after elections. In the months following the 2016 and 2020 elections, the prices of Bitcoin and Ethereum rose dramatically, marking massive bull runs. Historically, these started quickly and lasted about a year or so.
2016-2017 was a big year
An investor who bought $1,000 worth of Ethereum on Election Day 2016 would have seen their investment grow to more than $25,000 just one year later.
|
period |
Bitcoin price ($) |
Ethereum price ($) |
|---|---|---|
|
Election Day (2016) |
703 |
11 |
|
2 months later |
908 |
10 |
|
6 months later |
1,172 |
42 |
|
1 year later |
7,141 |
294 |
Data sources: Yahoo Finance, CoinLore, rounded to the nearest dollar
2020-2021 was big, but not by much.
An investor who bought $1,000 worth of Ethereum on Election Day 2020 would have seen their investment grow to more than $10,000 just one year later.
|
period |
Bitcoin price ($) |
Ethereum price ($) |
|---|---|---|
|
Election Day (2020) |
13,550 |
383 |
|
2 months later |
32,129 |
774 |
|
6 months later |
59,397 |
2,135 |
|
1 year later |
63,254 |
4,588 |
Data sources: Yahoo Finance, CoinLore, rounded to the nearest dollar
However, where you buy your cryptocurrencies is important. Exchanges were hacked and many went bankrupt. The last thing you want is to have your money stolen by a scammer.
Trust is in low supply and high demand. Thankfully, many established financial institutions now offer encryption services.
Compare trusted exchanges Protect your investment from unexpected losses. Cryptocurrency prices are uncertain, but the safety of your wallet doesn't have to be guaranteed.
Elections reduce uncertainty
When a president takes control of the White House, uncertainty tends to decrease. This is one explanation why major crypto markets tend to rally after elections. It's reassuring to feel like the president knows how to regulate cryptocurrencies, even if he appears to hate them.
However, the cryptocurrency market is unstable no matter who the president is. Bitcoin fell by approximately 65% from January 6, 2018 to February 6, 2018. By September 2018, the cryptocurrency had fallen 80% from its peak in January. This kind of crash is very common in the cryptocurrency market.
The president has limited control over the virtual currency market
The president has limited direct authority over the virtual currency market. Most regulation is handled by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Treasury Department.
However, the president has indirect influence over the cryptocurrency market.
An elected president can issue executive orders directing federal agencies to study and develop crypto-related policies. President Joe Biden did this in March 2022 when he signed an executive order calling for a comprehensive review of digital assets, also known as cryptocurrencies.
The president can also appoint the heads of major regulatory agencies, such as the SEC and CFTC, and can influence how regulators approach cryptocurrencies. For example, an agency head who dislikes Bitcoin could make it difficult for brokers to offer Bitcoin to investors.
Cryptocurrency market is growing regardless of presidential term
The influence of the president and political party on virtual currency prices appears to have been limited. Events that affect the price of cryptocurrencies are usually associated with uncertainty. For example, major exchange FTX declared bankruptcy, which shocked the market and caused prices to fall.
Since their inception, Bitcoin and Ethereum have driven widespread growth in the cryptocurrency market. Many, if not most, specific currencies failed to gain significant traction. But overall, the market capitalization of cryptocurrencies has grown from $0 in 2008 to $2.31 trillion as of this writing.
Given the warnings of FTX collapse, it is important to choose a reliable exchange. Comparison of top cryptocurrency platforms You can reveal safe places to put your money. Whether prices rise or fall after this election, using a trusted exchange will ensure you are prepared for whatever the market may bring.
