US election result unlikely to impact Q4 Bitcoin surge, hedge fund predicts

Bitcoin’s price is poised to benefit from the upcoming U.S. presidential election, no matter who wins, according to CK Zheng, the chief investment officer at ZX Squared Capital.

Historically, Bitcoin has seen strong fourth-quarter gains following its halving events, and this trend is expected to continue. Zheng pointed out that both U.S. political parties have failed to address rising national debt and deficits, which he believes will work in Bitcoin’s favor post-election.

“Neither the Republican nor Democratic parties are properly tackling the growing U.S. debt, which could be a major tailwind for Bitcoin after the election,” Zheng shared.

Bitcoin has previously thrived amid the uncertainty surrounding U.S. elections, and Zheng believes this year will be no exception. Data from CoinGlass also shows that Bitcoin has experienced significant fourth-quarter rallies, often exceeding 50% gains in six instances since 2013. Notably, Bitcoin’s halving cycles have played a critical role in boosting these gains.

In 2020, the year of the last U.S. election and a Bitcoin halving event, Bitcoin surged by 168% in Q4. Zheng is optimistic that Bitcoin could reach new all-time highs by the end of this year or shortly afterward.

However, Samantha Yap, CEO and founder of Web3 PR firm YAP, emphasized that the most interesting aspect of these rallies isn’t just the price spikes. “The real significance is in the surge of retail interest across the crypto space,” she said. According to Yap, media attention tends to follow this influx, driving broader public engagement. The challenge for the crypto industry is to ensure that new users find accessible and practical applications to adopt during these peak periods of interest.

Zheng also noted that a potential 50 basis point interest-rate cut from the Federal Reserve could serve as another bullish factor for Bitcoin and other high-risk assets, assuming the U.S. economy can avoid a recession. If the Federal Reserve can achieve a “soft landing”—balancing inflation without tipping the economy into a downturn—Bitcoin’s price could move in tandem with tech-heavy indices like the NASDAQ.

Leo Fan, a founder of Cysic, a layer-1 blockchain focused on zero-knowledge proofs, added that liquidity is slowly returning to the market. This renewed liquidity, along with Bitcoin’s reputation as “digital gold” and a hedge against broader economic uncertainties, may attract more institutional investors, especially as traditional markets remain volatile.

At the moment, Bitcoin is trading around $64,400, down 2% in the past 24 hours.

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