The US election week has shown an increase in the Bitcoin’s level and marked the cryptocurrency performance much better than other major asset classes this year.
The cryptocurrency is at its highest level since January 2018 and Bitcoin surged up to 9.2 percent to reach $15,301 in New York, experts opined that it can be either due to the uncertainty from the US election or the future of the pandemic or fear of missing out.
The Bloomberg Galaxy Crypto Index of digital currencies (BGCI), an index designed to measure the performance of the largest cryptocurrencies including Bitcoins traded in US dollar, has increased about 120 percent in 2020 which exceeds gold’s near 30 percent jump.
Since the US presidential election day on 3rd November, in the past three days, the crypto index has rallied nearly 11 percent and the period also saw a fall of the dollar into its lowest since 2018.
Crypto proponents say that an escalating pandemic and sliding dollar amid the unsteady monetary policy will fuel more gains as investors like Square Inc. and Paul Tudor Jones. JPMorgan Chase & Co.’s JPM Coin was reportedly used to make a payment for the first time.
While skeptics argue crypto markets have previous stories of wide fluctuations and are merely riding a tide of liquidity. The founder and CEO of Empire Financial Research, Whitney Tilson states that he still regards cryptocurrencies as “a techno-libertarian pump-and-dump scheme” and suggests most of the investors to avoid it.
Currently, the Democratic nominee Joe Biden is at the edge of becoming the 46th President of the US by defeating Donald Trump, who has questioned the credibility of the election. A rigid Senate race could make the chamber in Republican control, setting up a divided government that diminishes the odds of huge financial stimulus and increase pressure on the Federal Reserve to loosen monetary policy even more.
“Gold, silver and Bitcoin have worked like a dream in the weak US dollar environment and has attracted huge client interest,” Chris Weston, head of research in Pepperstone Group, stated.
