Bitcoin is flying after Donald Trump's victory
In May, a Juniper Research study (“Will Bitcoins Bite Back?“) predicted that the price of the digital currency bitcoin would jump if Donald Trump were elected. On Tuesday, Trump was elected, and bitcoin jumped. The currency is up nearly 3% since Tuesday night, hovering around $725.
“If Donald Trump becomes President of the US,” said Dr. Winslow Holden in a statement with the study, “there is the very real prospect of turmoil on world markets… Bitcoin would thrive in such an environment.”
Bitcoin has in fact been on the rise all fall, not only because of the election. The price is up 19% in the last month, 23% in the last three months, and 68% in 2016. But in the next few days and perhaps months, the uncertainty after Trump’s win will likely serve as an accelerant.
Investors see bitcoin as a safe haven from fiat currencies (hence why it rises when the Chinese yuan falls), and an asset largely untied to mainstream markets. Gold typically behaves the same way, and indeed, gold shot up to $1,320 on Tuesday night as Trump closed in on the presidency, though it fell back to earth on Wednesday and is now at $1,275.
Bitcoin’s October rise has been mostly due to heightened activity in China, where the yuan is falling and the government has tightened capital controls. Bitcoin prices also spiked during the bank shutdown in Greece last year.
Juniper Research says the Brexit vote, back in June, is still having an impact as well: “The ongoing ramifications around Brexit are also likely to act as an additional spur for higher activity levels.”
If Brexit helped contribute to a bitcoin bump, then Trump’s win is likely to do it, too. Many were quick to compare the surprising result of the US election to the EU referendum result. Trump, in the days before the election, told crowds that his win would be like “Brexit plus plus plus,” and nicknamed himself “Mr. Brexit.”
While Trump and bitcoin might seem to have something in common (Coin Telegraph made the case that Trump would eventually cozy up to the coin), his campaign never accepted donations in bitcoin. Hillary Clinton’s campaign considered accepting donations in bitcoin, a leaked email thread revealed, but John Podesta was more intrigued by the digital currency Ven, writing that bitcoin suffers from a “libertarian Ayn Rand schtick.” Sen. Rand Paul and Gov. Gary Johnson were the only two presidential candidates to accept bitcoin.
It doesn’t matter now: Trump won, and bitcoin benefited without his support. The coin doesn’t need Trump to champion it in order to succeed.
The defining word of this US election is the same word that defined the Brexit vote: “uncertainty.” As the Juniper Research report noted, bitcoin’s price rose in the weeks leading up to the Brexit vote, then fell a little bit just before the vote when the outcome looked clear, then spiked when the outcome was, in fact, a big surprise. Expect the same to happen after Trump’s win.
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Daniel Roberts is a writer at Yahoo Finance, covering technology and sports business. Follow him on Twitter at @readDanwrite.
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