Importance of Holding Bitcoin Regardless of Election Outcomes

Beyond Politics: The Case for Holding Bitcoin Through Electoral Cycles

Author

Chase McGhee
July 29, 2024

In partnership with

Introduction đź“Ť

The U.S. presidential elections always generate a flurry of speculations about the impact of various outcomes on financial markets, including cryptocurrencies like Bitcoin. The context of a Kamala Harris versus Donald Trump presidency provides a vivid example of such uncertainties. However, irrespective of who wins, holding onto Bitcoin might be seen as a wise strategy for several reasons:

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1. Political Independence and Decentralization

Bitcoin's core value proposition is its decentralization, operating independent of traditional financial systems and political influences. This makes Bitcoin inherently resistant to changes in political landscapes. While regulatory policies can affect market sentiment and immediate prices, Bitcoin’s foundational technology and its global acceptance shield it from being tied to the political fate of any single country. As seen in the documents, both Harris and Trump have shown varying levels of engagement with the crypto sector, yet neither can control Bitcoin's decentralized network.

2. Long-term Appreciation Potential

Historically, Bitcoin has shown significant long-term appreciation. Its limited supply cap at 21 million coins implies that over time, with increasing demand and adoption, the value is likely to rise irrespective of short-term political events. Thus, holding Bitcoin can be a hedge against inflation and a strategy for long-term wealth accumulation, as implied by Trump's comments at the Bitcoin 2024 conference regarding the strategic value of holding onto Bitcoin.

3. Market Resilience

The resilience of Bitcoin’s market is evident from its recovery after political shocks. For example, following initial declines due to uncertainty about Harris' stance on crypto, Bitcoin quickly rebounded, demonstrating its robust market confidence. This resilience underscores the advantage of holding Bitcoin through electoral cycles, which often cause temporary market jitters.

4. Diversification Benefits

Bitcoin provides diversification benefits that are crucial during times of political and economic uncertainty. It has a low correlation with traditional assets like stocks and bonds, which may react differently to election outcomes. For instance, Trump’s aggressive crypto policies aimed at making the U.S. a crypto capital could contrast with potentially more stringent regulatory approaches under Harris. Bitcoin, by virtue of its global nature, offers a non-correlated refuge during such policy shifts.

5. Geopolitical Considerations

As global geopolitical tensions fluctuate, Bitcoin stands out as a non-sovereign asset. This quality becomes particularly appealing in scenarios where domestic policies might be unfavorable. Regardless of U.S. electoral outcomes, Bitcoin remains a global asset, influenced more by international sentiments and technological advancements than by U.S. politics alone.

6. Institutional Adoption and Technological Integration

The increasing institutional adoption of Bitcoin and its integration into financial technologies is a trend largely independent of political changes. Both Harris and Trump have acknowledged the significance of blockchain and cryptocurrencies, even if their approaches differ. This bipartisan recognition, coupled with ongoing institutional interest, suggests that Bitcoin's ecosystem will continue to develop regardless of who is in the presidency.

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Turn out the lights on traditional savings accounts. With our high-yield cash account, your money is earning 11x the national average**.

*The national average savings account interest rate is reported by the FDIC (as of 3/18/24) as the average annual percentage yield (APY) for savings accounts with deposits under $100,000.

Conclusion

Holding Bitcoin transcends the immediate impacts of electoral outcomes, aligning with a broader vision of financial independence, technological innovation, and global market dynamics. While regulatory environments may shift, the long-term perspective on Bitcoin—supported by its inherent political neutrality, market resilience, and growth potential—makes a strong case for maintaining investments in this digital asset through varying political regimes. Thus, irrespective of whether Harris or Trump occupies the White House, Bitcoin holders might find it prudent to focus on these enduring qualities rather than react to transient political events.

Start earning today

Turn out the lights on traditional savings accounts. With our high-yield cash account, your money is earning 11x the national average**.

*The national average savings account interest rate is reported by the FDIC (as of 3/18/24) as the average annual percentage yield (APY) for savings accounts with deposits under $100,000.