Over the course of the week, with the start of November, bitcoin had managed to reach new highs, driven by growing uncertainty over the outcome of the US presidential election.
This trend became latent after polling day, when the prevailing uncertainty associated with not knowing the final outcome of the election began to push the market higher.
Bitcoin price plunges $850
By Thursday, bitcoin had risen by more than 7% and was trading above $15,000. This was the highest level for almost three years. Part of the bullish momentum stemmed from growing general interest in the cryptocurrency as the US dollar weakened.
But on Saturday, bitcoin plummeted $850 on news of Democratic candidate Joe Biden’s victory in the state of Pennsylvania, sending the cryptocurrency’s price plummeting by more than 5%.
However, 24 hours later, after this fall, the price has fully recovered, trading at the time of writing at $15,421.91, proving that the rise in bitcoin’s price has a more organic basis.
Uncertainty gripped the markets, following the announcement that Biden had virtually become the new President of the United States after winning the necessary electoral votes in Pennsylvania, the uncertainty has not diminished.
Although Biden, as the new president said on Twitter:
“America, I am honored that you have chosen me to lead our great country. The work ahead will be difficult, but I promise you this: I will be a President for all Americans, whether you vote for me or not. I will keep the faith you have placed in me.”
The current President of the United States, Donald J. Trump, who is his rival for the Republican Party, refuted this media claim, also via his Twitter account, where he declared that “he was the winner and by far”.
It was this reaction that apparently caused the temporary collapse of bitcoin, although it has already recovered from this event, it is likely that in the event of political instability in the United States, the product of lawsuits brought by Trump, there will be other similar falls.
The only thing that is clear is that bitcoin has matured much more, as its price is no longer under the control and influence of miners, as it was for some time. This is borne out by the latest report from Coin Metrics.
In this report, the company explains that the influence that miners had on the price of bitcoin is steadily diminishing, as fewer and fewer coins are left in the hands of miners.
Obviously, this reduces the miners’ ability to influence the secondary market, as they constantly have to spend their money to cover the miners’ operating costs, including electricity and rent.
For now, many in the community believe that Biden could be a hope for bitcoin, as he has been considered to replace Gary Gensler, former chairman of the Commodity Futures Trading Commission (CFTC) under President Obama.
In theory, Gensler would be tasked with overseeing Wall Street and acting as a financial adviser to the White House, but given his pro-cryptocurrency stance, some believe regulation to boost the cryptocurrency ecosystem in the US could be on the cards.
Gensler, is a former Goldman Sachs executive and knows cryptocurrencies and the financial technology sector inside out. He was also appointed Senior Advisor to the Director of the MIT Media Lab and Senior Lecturer, MIT Sloan School of Management in January 2018.
While at MIT, he taught a course on how bitcoin and blockchain could be used in finance, so many see Gensler as potentially bringing new momentum to the bitcoin and cryptocurrency ecosystem in the US.
This has been a big year for the leading cryptocurrency, as the value of a bitcoin more than doubled in 2020. The gains it has left traders with, since the beginning of October, have been substantially high in recent weeks, since which it has risen by 40%.
With a scenario like this, it is possible that Bitcoin will continue its bullish rally until the end of the year, which is why more and more HODLRs are hanging on to their coins to get a good return before Christmas.
