Bitcoin flirts with breakout ahead of US election result

Bitcoin rose by 2.05% in a matter of minutes earlier today as traders anticipate the result of the 2020 US presidential election.

The surge coincided with the open of US markets, with the S&P500 also experiencing a strong move to the upside.

Virgin Galactic chairman Chamath Palihapitiya commented on the rise by stating that “markets are voting Biden”.

Throughout 2020 Bitcoin has closely mirrored the price action of the US stock market, tanking in March before recovering to dizzying heights in the following six months.

Whilst Bitcoin is often touted as a safe haven asset that should be used as a hedge against the traditional financial system, its correlated performance against the stock market suggests that a Biden win would also be more favourable for Bitcoin.

A win for Donald Trump, who bookmakers have currently priced at 3/1, would shock the market and cause a short-term sell-off.

This may also see Bitcoin return back to the previous level of support at $13,400, although this would still be remarkably bullish from a macro sense considering one Bitcoin was worth just $4,000 just eight months ago.

Alex Mashinsky, CEO of Celcius Network, believes that the election “is increasing the uncertainty and the need companies have to have more reserves and more liquidity”.

He continued: “The global economy is going through a slow motion recession, as the demand for goods and services is slowing down. Meanwhile the central banks pump liquidity to try and reverse this trend. All of this is not good for GDP or for our employment rates.

“No matter who wins we will have a severe recession in the next 2-3 years.”

For more news, guides and cryptocurrency analysis, click here.