As the US presidential pre-election race is in full swing, experts and average traders are trying to predict how this event is going to impact the much-anticipated altcoin market. And impact altcoins certainly will.
The whole crypto world is keeping their eyes on the two main candidates – Joe Biden and Donald Trump, with many supporting the latter for his readiness to embrace crypto and accepting donations not only in Bitcoin but various altcoins as well, including meme cryptocurrencies. Biden represents the Democratic party, while Trump comes from the Republicans.
Potential impact of the presidential race on financial markets
The presidential pre-election race in the US is a major event which usually has a heavy impact on multiple aspects of the country’s economy, including the financial markets and the cryptocurrency market with the long-anticipated altcoin season in the near future. In particular, elections of a US president usually add quite a bit of volatility and uncertainty into the world of finance, which includes the crypto market.
Among the key ways how the presidential pre-election race can have an impact on the altcoin season is by altering the market sentiment. As the election event draws nearer, investors and traders may start behaving particularly cautiously to avoid any possible risks while investing in assets and trading them. This may lead to price fluctuations throughout the cryptocurrency market.
There is high uncertainty that rises regarding potential changes in the government policies, regulatory actions and economic reforms that each candidate and their party proposes. All of this is likely to create a feeling of instability, which in turn can affect the desire of retail traders and big market participants to make financial bets on altcoins.
Another important thing is that the result of the US presidential election can directly impact regulatory actions regarding the cryptocurrency market. The political parties, whose representatives take part in the election, may implement totally different approaches to treating crypto assets, the nascent blockchain technology, as well as show opposite stances on financial regulation and this, in return, is likely to impact the trajectory that the altcoin season may take. For example, a party that offers stronger support for blockchain and proposes crypto-friendly policies may trigger a wave of enthusiasm amongst investors and this may potentially spark a bull run for altcoins.
Geopolitical risks impacting the altcoin season
Another thing aside from concerns about regulatory actions that can have a sturdy impact on the altcoin season’s future trajectory is the wider macroeconomic environment that takes shape depending on the angle the US presidential pre-election race takes. Economic policies that the candidates suggest, e.g. quantitative easing measures, some sort of tax reforms, etc, can influence market confidence and market conditions in general. Investors’ decisions in the cryptocurrency market and related to altcoins in particular can be swayed either by economic stability or a rise in uncertainty that results from the election outcome.
Another type of factors related to the US presidential pre-election campaigns which can send ripples across global financial markets and impact the demand for non-traditional assets, like Bitcoin and altcoins, is geopolitical factors.
Geopolitical issues and tensions, disputes related to trade and other international spheres, foreign policy decisions can make uneven market sentiment, driving investors away from centralized trading platforms (CEXes) towards decentralized exchanges (DEXes). This way investors attempt to build some protection against risks that would start hitting global markets. Altcoins, which offer high volatility along with potentially massive returns, may gain higher than usual attention when markets face high geopolitical uncertainty.
Additional factors impacting altcoins to keep an eye on
Notably, while the US presidential pre-election race can indeed have a massive impact on altcoins, the crypto market is usually also influenced by tons of other factors. As a rule, those include technological developments and updates, new market trends, sentiment of crypto investors (cryptocurrency whales, in particular) and macroeconomic indicators.
The dynamics of the altcoin market is formed by these elements interacting between each other regardless of what trajectory the political environment takes.
Therefore, the presidential pre-election race in the US should really be considered by investors and traders as only one of the multiple variables when calculating risks and potential developments of the altcoin season. Overall, when considering all investment options and the associated risks it is vitally important to perform proper research, take into account the latest market developments that arise along with increased uncertainty in the markets.
