US election helps Bitcoin become a safe-haven asset like gold

On November 9, the results of the 2016 US presidential election were released, and Trump won. After that, the global stock market experienced a flash crash, while the prices of gold and Bitcoin rose sharply at the same time. According to data from OKCoin, a well-known digital asset trading platform in China, the price of Bitcoin was about $726 on Wednesday morning. Compared with the price of Bitcoin of $708 the day before, the increase reached about 3%.

During the campaign, Trump expounded on a unique economic and diplomatic policy, which had a huge impact on the global financial market and caused panic. After Trump's election, the risk aversion of global capital rose rapidly, and people sought products that would preserve and increase their value. The simultaneous rise in gold, silver and Bitcoin showed that Bitcoin was increasingly recognized by global capital, and its risk aversion attribute was strengthened again.

Figure 1: Gold price chart

Figure 1 is a chart showing the trend of gold prices. From the chart, we can see that on November 9, the gold price once hit $1,337.5, with a long upper shadow. Since Trump has maintained a leading advantage since the beginning of the vote, the gold price has been rising at the same time, resulting in such a long upper shadow line that is rare in the market. On November 10, as of press time, the gold market price still maintained a strong rise, with a long entity, and it is very likely to maintain an upward trend in the future. This shows that global capital continues to flow into investment products with a hedging nature.

Figure 2: Bitcoin price chart (Source: OKCoin)

Figure 2 is the price trend chart of OKCoin, a Bitcoin trading platform. From the figure, we can see that the opening price of Bitcoin on November 9 was 4826.75, and the closing price was 4924.38, with an increase of 2.02%, a medium-sized positive line with a long upper shadow, almost the same as the gold price. As analyzed yesterday, due to the continuous strong recovery of Bitcoin's recent downward trend, it is very likely to be temporarily adjusted down, but we should pay close attention to the specific situation of the US election. Trump's election has caused panic in global capital, and it is very likely to drive the continuous rise of Bitcoin prices.

OKCoin analysts said that when any investment product has a major fundamental, technical analysis will often take a back seat. After Trump was elected, the market remained highly alert within the first 100 days of his administration, buying safe-haven funds first and then deciding on specific circumstances after the market digested the panic. Therefore, this is good news for the Bitcoin and gold markets. In the coming period, Bitcoin is likely to remain on the rise.

In summary, long-term investors should continue to hold and gradually increase their positions around 4,700 yuan. Short-term investors should seize this wave of market conditions and trade back and forth between 4,800 and 5,000 yuan, enter and exit quickly to realize profits. Uncertainties in the global market continue to accumulate, so it is important to set stop-profit and stop-loss orders.