US Midterm Elections stand to Influence Crypto PricesNovember 8, 2022
The Midterms are here and the US is going to the same-day voting polls. So far, over 40 million ballots have been cast already, showing a substantial interest in the elections and the way they will go. The Republican Party and its supporters are showing a high degree of confidence that they will be able to take control of the US Congress. The implications of that move would be widespread, mainly in the GOP’s ability to block any measure or law that the Joe Biden administration from the Democrat camp presents to the lawmakers. That is not going to be good news for the struggling US economy, which presently seems to be in a total void of any good news, either on a macro or micro level.
A very similar thing applies to the crypto scene not just in the US but across the globe. A singular promising prospect for the coming election in some quarters is the notion that the Republican Congress could be more bullish on the crypto potential and its applications inside of the mainstream economy. Others believe that this is fishing for any possible silver line in the very dark cloud for the coming months. But, the elections will no matter what produce a short-term influence on the crypto price and market capitalization, especially when it comes to the BTC token and the bitcoin network as a whole.
Tense Political Landscape
Ever since the election of Donald Trump as the US President back in 2016, the political landscape in the country has been more than tense. The US Democratic Party took over the control of the US presidency, but it had control of both legislative chambers. But, the resulting period did not bring any drastic improvement to the lives of everyday individuals. The Joe Biden presidency began in the midst of the COVID-19 pandemic, which took over one million lives in the US, resulting in the most coronavirus deaths in absolute numbers.
The recovery after the pandemic slowed down was also very cumbersome and uneven, which eventually brought the country to the edge of a full-blown recession. Naturally, the voters are very unhappy with that possibility and many are willing to cast their ballots for the Republican nominees. That is why many analysts believe that a red wave could take over the House of Representatives, where the difference in delegate count is very slim. Others believe that even the Senate could lose its Democratic majority.
Elsewhere in the world, there are a number of topics that are dominating the present discussion among the political establishment. In the EU and the rest of Europe, those related to the energy crisis and the war in Ukraine are most prominent. But, in the US, the main topic of all discussions boils down to the economy. Naturally, it plays a massive role in the level of happiness of the population with its government. Presently, all sights show that a lot of Americans are by no means happy with their government and the course that the administration of President Joe Biden decided to take. During the pandemic, the government of the same President gave out stimulus packages that were designed to help out an economy that was greatly struggling because of the pandemic.
But, there was a big price tag for the same stimulus checks. That is why the inflation is presently four times higher than the FEDs target of 2 percent. Ironically, the stimulus checks that went out more than a year ago fueled the crypto bull run of the same period. This money not rarely ended up as funds that were immediately transferred to crypto, which is why many digital exchange platforms saw BTC purchases of 1,200 USD. That was the precise figure given out by the US government to many individuals. Previously, only esports tournaments and similar large-scale events featured the same high-value crypto purchases. But, in 2021, they became commonplace. However, the same crypto party in the US is now well and truly over, especially on account of the ongoing crypto winter.
Republican Crypto Tailwinds
A possible big night for the Republican party could be beneficial for the crypto markets and the wider cryptocurrency development scene. There could even be a two-fold benefit to their victory for crypto. First of all, the overall markets generally appreciate a split leadership between the Democrats and the Republicans. That setup is seen to be less able to instigate draconic measures in the financial sector, thus easing fears of some quick and huge development in the same space. Also, a Republican Congress and Senate would involve a lot more debate regarding any fiscal or regulatory policy changes.
The notion here is that a positive movement in the traditional markets would quickly reappear in the crypto markets as well. Secondly, the crypto domain itself would be likely free of any regulatory moves for at least 12 months from the election. So, in theory, a split government would usher in a new age of more cooperation and discussion among the political elite, which should help ease some of the anxieties regarding the impending recession, but also result in more thought-through measures and decisions. But, the recent past of the US political landscape shows any such notion to be wishful thinking at best and delusion at worst.
There is a broad consensus that market participants are not expecting huge swings in the market capitalization or price of tokens in the period right after the elections. While any big voting process by default adds a new layer of uncertainty in the economy of any country, there is also a history of midterms producing a positive effect on the stock market.
Presently, some of that can already be seen in the run-up to the election. The voting day itself opened up with a generally negative outlook and it quickly became even worse, but the volume appears to be rising. That is why many traders hope to at least create a substantial return on investment in the days that will follow November 8.