- If Joe Biden becomes a president, BTC will grow.
- DeFi industry may feel the pain due to tough regulation.
The presidential elections in the United States are just around the corner. While it is still hard to tell for sure who will secure the place in an Oval Cabinet, the most recent poll results show that Joe Biden, the Democratic presidential nominee, is leading the race.
At the time of writing, Biden is supported by 52% of the population, while Trump has gained 43%, according to the nationwide poll results.
Who’s ahead in national polls
It is worth noting that gaining the most votes doesn’t always result in a victory due to an electoral college system in the US. That’s what happened in 2016 Hillary Clinton when led in the polls with a significant majority of votes but lost the elections to Trump.
However, Joe Biden has been ahead of Donald Trump in most national polls since the start of the year. And the chances are that Trump won’t make it to the second term. So it is probably high time to access the implications of Biden’s presidency for the cryptocurrency industry.
Biden is to crack on DeFi
Joe Biden may be more preferable for the cryptocurrency industry as a whole, but the DeFi segment is set to suffer. The South Korean cryptocurrency exchange Bithumb believes that Biden’s administration would take tough regulatory measures against the decentralized finance industry.
While Biden’s victory may positively affect the cryptocurrency industry as a whole, he is expected to establish strict control over the DeFi market that has been booming recently with no limitations or oversight.
It seems that he will impose controls on decentralized finance (DeFi) that has grown rapidly during the absence of restrictions. The SEC has already included digital assets and financial technology (Fintech) as examination priorities in January. Judging from the fact that the SEC recently charged Abra, a cryptocurrency trading platform and wallet service provider, for supporting unregistered security-based swaps in digital assets and foreign currency, the SEC seems to put extensive scale controls, Bithumb writes.
Crypto ETF will get the green light
Simultaneously, the Democrat is known for promoting financial innovation, meaning that he will make way for several cryptocurrency-related policies that will encourage the approval of cryptocurrency exchange-traded funds (ETFs) with underlying assets such as Bitcoin and Ethereum.
Notably, the US Securities and Exchange Commission has already mentioned that it may be ready to give the green light to a crypto ETF some time in the future. Biden’s presidency may speed up the process.
Bitcoin holders will rejoice
Also, Biden is an advocate of a more aggressive fiscal stimulus package than Donald Trump. If he gains power, he is sure to pump more money into the economy to pull the US out of recession. In this case, the US’s national debt-to-GDP ratio would continue to grow, making a case for more panic selling on the traditional markets and diverting investors’ attention to the digital assets.
US’s national debt-to-GDP ratio
Apart from that, more QE from FED will increase the inflationary pressure on the US and allow BTC to surge to much higher levels as it is regarded as a hedge against inflation.
Furthermore, the Federal Reserve is still continuously conducting QE, which may substantially weaken the US dollar. Under these circumstances, the hash rate of Bitcoin is still showing an uptrend, so the price of Bitcoin will show increases for quite a long time.
Firstly, if Biden wins the presidency at the election after a neck-and-neck race, the defeated Trump may raise an objection and file for a lengthy legal battle. It will cause some considerable uncertainty, which might lead to the rise of Bitcoin’s price once more due to a preference for safe assets.
To sum it up, Biden’s victory is regarded as a positive event for the cryptocurrency industry that may send Bitcoin’s price to the moon. However, the DeFi industry may feel the pain due to tighter regulation and control.
Published at Tue, 20 Oct 2020 14:47:14 +0000-Biden’s win of the US presidential election could have different effects on Bitcoin and DeFi