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Donald Trump, the 45th President of the United States is already settled in the Oval office and he has begun implementing some policy changes. However, Wall Street is still somewhat immune to the expected negative effects of a change in the leadership of the American government. Many analysts submitted that Trump’s victory at the polls would cause equities to crash but U.S. stocks have gone on to record new highs.

Market bears also held out hope that the U.S. equities markets will crash once Trump takes the oath of office. However, U.S. stocks have maintained the bullish rally and the Dow Jones is actually staying on course to 20,000. Interestingly, Trump’s victory has a direct influence on the price of Bitcoin because Bitcoin is an alternative currency that provides investors with a safe haven in times of volatility in the economy and in the financial markets. This post seeks to explore how Bitcoin is likely to fare under President Trump.

Bitcoin to shine brighter under president Trump

Donald Trump’s actions, inactions, and words have a huge influence on the global economy and Bitcoin is not likely to be spared from that influence. Nonetheless, it is becoming increasingly obvious that the Trump factor could provide bullish tailwinds for the Bitcoin investment community.

To start with, Bitcoin was the only asset that recorded marked gains on the heels of Trump’s victory in the 2016 U.S. the presidential elections. After Trump won the election, Bitcoin recorded the biggest gain among all financial instruments from under $700 to more than $736 within a couple of hours. In contrast, U.S. stocks recorded a flash decline before they recovered after investors started warming up to the idea of President Trump.

Of course, realists will be quick to point out the fact that Bitcoin recorded those gains because of an increase in market fears that Trump’s victory will trigger a fresh bout of uncertainty in the global economic and financial landscapes. However, the fact remains that Trump is one of the most controversial public figures in recent times and his position as the president of the United States will amplify the volatility and uncertainty caused by the controversies surrounding his presidency and his policies.

Trump might become sympathetic to Bitcoin

The second reason Bitcoin investors might enjoy bullish tailwinds under President Trump is that Trump might turn out to become sympathetic to Bitcoin. Trump already has Bitcoin supporters such as Mick Mulvaney and Peter Thiel in his team.

For instance, Mick Mulvaney openly supports Bitcoin, Blockchain technology, and the development of cryptocurrency. Mulvaney is tapped as the Director of the Office of Management and Budget in Trump’s administration. Peter Thiel is another outspoken Bitcoin supporter and he has investments in a number of Bitcoin startups. Hence, we can reasonably expect that these men who has the president’s ears could ‘lobby’ for policies that provide an enabling environment for Bitcoin to thrive.

Yuan Devaluation:

The International Monetary Fund announced the launch of the new Special Drawing Right (SDR) valuation basket on October 1st. This basket now includes the Chinese renminbi making it the fifth currency in the SDR basket. China is noted to have a credit fueled growth. Most of the Heavy industries in the leading sectors are escaping the inflation by exporting their products abroad. But for China to fit in with other currencies in the basket, it has to depreciate Yuan. They have been holding off this move as they were in the review period by IMF. Now that they have bagged the SDR, they have started to devalue Yuan slowly but consistently. The first wave of the move was observed in the last week of October which prompted the Bitcoin prices to go up.

Ethereum Hard fork:

A hard fork is a change to the underlying Ethereum protocol, creating new rules to improve the system. After consensus is reached on what changes should be included in a hard fork, changes to the protocol are written into the various Ethereum clients. Since September 18th (UTC), the Ethereum network has been under attack by a person or group resulting in large delays before transactions were processed. The network is currently filled with pending transactions which is causing users delays in processing their transactions. Hence both Ethereum and Ethereum Classic have Hard forked on 18^th and 25^th of October respectively. This might be one of the major reasons why increased trading volumes and higher prices were observed in Bitcoin.

Bitcoin to see correction:

Owing to the above major factors, the cryptocurrency has risen beyond the $700 levels in the last week of October. But one concerning factor to this uptrend is the fact that the rise has been meteoric and not organic. The break out from $620 to $640 levels saw the prices coming down again to compensate for the lack of volumes in that region. Similarly the break out to above $700 levels saw very few volumes. This might compel the market to trade sideways in the void region for some time in the form of correction. Later the genuine uptrend might continue taking the prices further higher.

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Here’s Why Bitcoin Might Soar Higher Under President Trump