Babbitt Original | Biden is the king, BTC is rising? Bitcoin is approaching $15,000 and hits a new high in two years

On November 3rd, Eastern Time, the US election entered the final vote counting stage. As of press time, ABC News data showed that Biden received 253 electoral votes and Trump received 214 electoral votes. (Note: Fox News has 264 votes, but ABC News shows that Biden is currently leading in Arizona, but it has not been officially announced, and Arizona has exactly 11 votes)

The election situation disturbed the financial market and provided investors with excellent trading opportunities. As the election progressed, the gold market began to play a roller coaster trend. The three major U.S. stock indexes all turned positive. The Nasdaq 100 futures index once surged 4% and triggered a circuit breaker. Bitcoin hit a new high after Biden's chances of winning increased.

A repeat of 2016? Biden reverses course

Unlike the 2016 election, the results of major polling agencies in this election all show that Biden's support rate is much higher than Trump. In the 2016 polls, Hillary had only a slight advantage over Trump. The market is worried that this year's election will repeat the 2016 election night. On the night of the 2016 election, the gold market experienced a roller coaster-like performance of the largest fluctuations in modern history.

On November 4th, Beijing time, the election entered a stalemate. After the vote counting started, spot gold plunged nearly 1% in the short term, and Dow futures fell by more than 1% at one point. Bitcoin expanded its gains to 3.7% at 7:30 a.m. Beijing time on the 4th (18:30 p.m. Eastern Time on the 3rd) and re-entered the $14,000 per coin.

At noon on the 4th, Beijing time, as the election situation was revealed, Trump's popularity was once higher than Biden's. At that time, Fox News data showed that Biden had 238 votes VS Trump's votes, Biden had a slight advantage over Trump. At the same time, Trump won Ohio after winning the largest swing state Florida, and the national election map began to turn red.

After Trump's chances of winning improved, Dow futures began to recover lost ground, the Nasdaq 100 futures index surged 4% and once triggered a circuit breaker, spot gold continued to be suppressed and waited for a change in the market, while Bitcoin fell back and lost the $14,000 mark.

The market once predicted that Biden would have a hard time turning the tables, and many analysts said Trump would be re-elected. CITIC Securities Research Department published a report on the same day saying that whether Biden can complete the reversal needs to focus on the election results in Wisconsin and Pennsylvania, which is expected to be difficult because the order of counting ballots in Pennsylvania is to count on-site ballots first and then mail-in ballots, and the Democratic Party has a relatively higher support rate among mail-in ballots (this is why Trump opposes mail-in ballots). Based on the ballot counting situation in the two states at the time, CITIC Securities believes that it will be difficult for Biden to complete the reversal.

However, the situation reversed overnight. Wisconsin and Michigan, which had previously supported Trump, switched sides and supported Biden. Biden won 253 electoral votes, far ahead of Trump, who only won 214. As of press time, according to ABC News data, Biden is still 17 votes away from the goal of 270 electoral votes. In other words, if there is no accident, Biden will be qualified to be elected as the new president of the United States if he wins another 17 votes.

As of press time, there are still five states that have not announced the final results, namely Pennsylvania (20 votes), Georgia (16 votes), North Carolina (15 votes), Nevada (6 votes) and Alaska (3 votes).

Gold market roller coaster Bitcoin surges to a 2-year high

According to TD Securities strategists, on election night, the market believed that a Democratic victory would be good for gold, so the gold market was looking for opportunities for a "blue wave." In the early morning of the 5th Beijing time, after Biden's reversal, controversy arose in the election, and the gold market began a roller coaster ride: the day before, when Trump's momentum was high, gold fell below $1,900, and Biden won Michigan and Wisconsin in succession, and gold prices began to rebound.

After the Wisconsin State Election Commission announced that Biden won Wisconsin, the three major U.S. stock indexes, gold prices, and Bitcoin prices all soared. At 1 a.m. Beijing time on the 5th, Bitcoin re-entered $14,000, setting a new intraday high, and it continues to set a new high for the year; the price of gold rebounded in the shock, breaking through $1,900 at 2:30 a.m. Beijing time, and is still rising. Overall, the price of gold is still at a high level this year, but it is still some distance away from the new high of $2,000 this year; the three major U.S. stock indexes collectively opened higher and continued to rise.

After the results of Michigan and Wisconsin came out, Trump tweeted his dissatisfaction, adding more variables to the election. Trump tweeted: "Last night, I was firmly ahead in almost all key states, in almost all Democrat-run and -controlled states. Then, one by one, as the unexpected votes were counted, they began to magically disappear. This is very strange, and those 'poll experts' got it completely wrong, a historic mistake!"

The Trump campaign claims that it has filed legal lawsuits in multiple states, demanding a recount in Wisconsin, stopping the vote count in Michigan and Georgia, and filing lawsuits against poll observers and voter identification issuance in Pennsylvania.

Affected by this move, the market trend changed again, US stock futures turned down, gold prices were under pressure again, and the US dollar rose in the short term and returned to 94. As of the close of US stocks, the gains of the Dow Jones Industrial Average, S&P 500, and Nasdaq index narrowed, but they still closed up 1.34%, 2.2%, and 3.85% respectively. Bitcoin fell slightly after Trump's statement, but did not change the upward trend. As of press time, Bitcoin has risen by 7.7% in 24 hours and is approaching $15,000 per coin, setting a new high in two years.

Biden's election will have a more obvious stimulus effect on Bitcoin

Biden’s election could be good for Bitcoin.

According to The Hill, Biden's campaign team accepted Bitcoin donations in 2016 and stipulated that the value of each Bitcoin donation should not exceed US$100. Donors were required to use forms and wallet addresses to prove their identities.

Biden himself has not made a clear statement on Bitcoin, whether positive or negative. Biden's Twitter account was once affected by a hacker attack, and Biden once said that he did not hold Bitcoin.

But last month, Bloomberg reported that if Biden is elected, it will be good for Bitcoin. It is worth noting that Bloomberg founder Bloomberg withdrew from the election at the beginning of the year and made it clear that he supports Biden and becomes his financial sponsor to win the support of swing states. According to previous reports by Babbitt, Bloomberg has a more radical orientation in its reports in the field of encrypted digital currencies. Bloomberg reporter Joanna Ossinger recently wrote that DeFi has helped cryptocurrencies become the best performing assets in the first half of this year. Bloomberg financial reporter and co-host of the "Odd Lots" program Tracy Alloway directly expressed optimism about Bitcoin on Tuesday this week.

On the other hand, after Facebook's Libra plan was launched last year, Trump expressed his views on Bitcoin and crypto assets, and made it clear that he did not like Bitcoin and cryptocurrencies. "I don't like Bitcoin and other cryptocurrencies. They are not currencies, their value is extremely unstable, and they are built on thin air. Unregulated crypto assets can facilitate illegal behavior, including **** transactions and other illegal activities."

Trump's chief economic adviser Larry Kudlow said in 2014 that "Bitcoin is not a real currency" and that it is not a reliable medium of exchange and a store of value because it is difficult to regulate and its value fluctuates drastically. But this does not mean that Trump is against Bitcoin, because during his tenure, Trump strengthened the supervision of crypto assets, and increasing investor protection is conducive to the healthy development of the market.

From the perspective of major asset classes, if Biden is elected, it is expected that a large amount of stimulus funds will be injected to alleviate the impact of the epidemic on the economy, which may lead to inflation and currency depreciation. JPMorgan Chase believes that after the election, the US stock market will continue its bull market path, which is related to debt levels, market liquidity and central bank quantitative easing, rather than fiscal stimulus. Standard Chartered Bank believes that if Biden is elected, the weakness of the US dollar will benefit emerging markets and even high-risk emerging market assets. CITIC Securities' report believes that Trump's election is good for US stocks and US bonds, while Biden's election will bring about a correction downward for the US dollar and US bonds. UBS Wealth believes that if Biden is elected, the scale of fiscal stimulus may be less than expected, thereby reducing short-term pressure on the US dollar.

It should be noted that this election is generally considered to be one of the most divisive elections in the United States to date. Investors in the future market need to be careful to guard against losses caused by drastic short-term market fluctuations.