YEREVAN (CoinChapter.com) — The 2024 US Presidential election season creeps closer, with the prime question on everyone’s mind: Should the US brace itself for Doland Trump 2.0, or Joe Biden 2.0? While the general public expects heated debates on a wide range of policies, the crypto community has an additional concern – the possible repercussions of Trump 2.0 might influence Bitcoin and the crypto market.
Before diving into the main question, it is interesting to note the probability of the ex-president’s reelection in 2024.
Trump 2.0 or Biden 2.0?
Recent polls provide an interesting snapshot of the potential outcomes of the 2024 Presidential election.
According to a poll by NBC News, Donald Trump leads Joe Biden with a margin of 47% to 42% in a general election scenario. This poll also highlighted Trump’s significant lead in the 2024 Republican Presidential Nomination, showing Trump at 79% compared to Nikki Haley’s 19% and others in the race.
Business Intelligence Company Morning Consult’s tracking also reveals that Trump maintains a lead over Biden, with the latest figures showing Trump at 44% and Biden at 42%. Their surveys, conducted among a broad base of registered voters, indicate a slight narrowing of Trump’s lead, which was previously larger.
Quinnipiac University’s poll offers another perspective, showing Biden leading Trump 50% to 44% among registered voters in a hypothetical head-to-head matchup. This poll also explored voter priorities, indicating the economy as the top issue, followed by national security and healthcare.
US-China Trade War Could Continue
While Donald Trump has a substantial chance of winning the 2024 Presidential race, there is another sore issue at hand – the so-called “US-China trade war.”
The US-China trade war, initiated under President Trump, escalated tensions between the world’s two largest economies. In short, starting in 2018, Trump imposed tariffs on billions of dollars worth of Chinese goods, aiming to reduce the trade deficit and pressure China into changing its trade practices, which the US deemed unfair.
China retaliated with tariffs on US goods. The conflict impacted global trade, market volatility, and economic relations, leading to negotiations for a phase one trade deal signed in January 2020 to ease some tensions.
Now that Trump could win the elections in 2024, will he continue the high-tariff policy against China? According to Bloomberg, Trump has discussed with advisers the possibility of imposing a flat 60% tariff on all Chinese imports. On Feb. 4, 2024, he told Fox News, “Maybe it’s going to be more than that.”
As tensions rise between the two countries, the resulting economic strain could affect Bitcoin and the crypto market at large.
Bitcoin in Troubled Waters — Is Donald Trump Bullish?
It’s challenging to attribute Bitcoin’s price movements to any single event due to many factors affecting its value. However, the trade war between the US and China could have indirectly influenced Bitcoin’s price in several ways during Trump’s last presidency term (2017- 2021).
During periods of economic uncertainty and market volatility, investors often seek safe-haven assets to protect their wealth. Although traditionally, this role has been filled by assets like gold, Bitcoin has increasingly been considered a digital alternative.
The escalation of the US-China trade war, which introduced uncertainty into global markets, may have prompted some investors to turn to Bitcoin as a hedge against traditional financial market risks.
Additionally, in response to trade tensions, there were instances where the Chinese yuan was devalued, which led to increased buying power for Bitcoin within China. Investors in countries experiencing currency devaluation might turn to cryptocurrencies to preserve their wealth, driving up demand and potentially the price of Bitcoin.
Trump’s Policy Beneficial for Bitcoin vs US Dollar
If Trump wins Office for another four years, tightened capital controls in China, partly in response to the trade war, could lead individuals and businesses to seek alternative ways to move wealth across borders. Among other functions, Bitcoin offers a mechanism for capital flight, allowing individuals to bypass traditional banking systems.
Increased demand for Bitcoin as a vehicle for moving wealth out of China could have contributed to its price increases and potential increases in the future. However, it’s essential to recognize that Bitcoin operates in a global market.
NOTE: Bitcoin price sways under various factors beyond the US-China trade war. These include global demand for cryptocurrencies, technological developments, market sentiment, and broader economic conditions. Directly attributing Bitcoin’s price movements to the presidency of Donald Trump oversimplifies the influence of geopolitical and economic dynamics on the highly volatile and global cryptocurrency market.
Here are several other factors that greatly influenced the BTC/USD exchange rate in 2017-2021.
Trump Did NOT Raise Bitcoin Single-Handedly
To examine the connection between Bitcoin’s price movements and Donald Trump’s presidency, it’s helpful to consider the timeline and key events during his term, from January 2017 to January 2021. During this period, Bitcoin experienced significant volatility and several major price movements, with an overall growth north of 4,000% ($800 in Jan 2017-$34,000 in Jan 2021).
In 2027, Bitcoin was already on an upward trajectory due to increasing interest in cryptocurrencies and blockchain technology. At the time, Bitcoin’s price saw a massive rally, peaking at nearly $20,000 in December. This rally was driven by a surge in global interest in cryptocurrencies rather than specific policies from the Trump administration.
Throughout 2018, the cryptocurrency market experienced a significant downturn, often called the “crypto winter.” While this was largely due to market correction after the rapid gains of 2017, discussions around regulation and scrutiny of cryptocurrencies, including those in the US, contributed to market uncertainties.
The global outbreak of COVID-19 in 2020 and the subsequent economic impact led to significant financial market volatility. In response to the economic fallout, the US government, under President Trump, implemented substantial fiscal stimulus measures.
The increased money supply and concerns about inflation may have contributed to Bitcoin’s appeal as a “digital gold” or hedge against inflation. Bitcoin’s price started to recover and rally towards the end of 2020, culminating in a new all-time high in December 2020 and continuing into 2021.
