Bitcoin’s price rose with the election results as other fiat currencies such as the dollar, the yen, the peso all experienced fluctuations as the votes flooded in. The global bank BBVA, for example, tweeted today about its currency hedging policy.
The spike reportedly caused bitcoin to hit a two-year high of around $740.
Bitcoin was not the only digital currency to bump up from the election results, with the price of ZEC, or Zcash, also rising. That could also be attributed to ZEC still being in its infancy as a digital token, having just launched a few weeks ago.
This spike could be due to the current state of the market, with bitcoin acting as a haven to wait out the market flux; as cryptocurrency trader Jacob Eliosoff told Bank Innovation:
When markets are scared, investors turn to commodities and other relatively fixed-supply, safe-haven assets. Bitcoin is now in this category (with lots of idiosycratic risk of its own), so its rise was predictable. Arguably this is more a case of the dollar dropping than anything to do with Bitcoin.
This is in relation to his previous comments regarding the issue on Coindesk, which contained the memorable line, “I think a Trump presidency would be great for bitcoin, much like nuclear war would be great for bitcoin.”
This is similar to the rise bitcoin values saw after Brexit was announced this summer. The value of the British pound also fell noticeably as bitcoin and other cryptocurrencies exhibited a spike in value, acting as a (relatively) safe asset for many in a time of market volatility.
The long-term effect of the election on bitcoin’s value is of course not immediately measurable, so we will have to wait and see whether bitcoin’s value, as well as the fluctuations of fiat currency, will follow the same pattern as after the Brexit.
Outside of the cryptocurrency world, some are speculating on the effect the election result might have on industries such as remittance; with Aite Group tweeting out possible shake-ups specifically in Mexico.
Brion Nazzaro, group compliance director and director for WorldRemit Corp on the issue, says that remittances from the U.S. to other countries total almost $135 billion a year:
Trump earlier this year threatened to cut off remittances to Mexico unless Mexico made a one-off payment of $5-10bn to pay for a US-Mexico border wall. The remittances industry is extremely complex and it would be very difficult politically, legally and operationally to sever flows to any one country. While there are a lot of unknowns from this election, remittances from the US will continue.
The majority of industry watchers are also looking to see what the president-elect’s approach to financial regulation will be, with speculation ripe on both sides.2 - Readers Like This Post