How will Trump vs. Harris Saga Impact BTC?

As the 2024 U.S. presidential election inches closer, the potential impact of the result on Bitcoin price has become a hot topic among crypto enthusiasts and investors. In a recent interview, American entrepreneur Mark Moss shared his insights on how the race between Donald Trump and Kamala Harris could shape Bitcoin’s future. In addition, he weighed on the current macroeconomic situation.

The Role of the U.S. Election in Bitcoin Price Movements

The upcoming election introduces a key variable to the Bitcoin price trajectory. Moss believes a Trump victory could have a massive impact on BTC’s future. “Trump and RFK have said they would put Bitcoin on the reserves,” Moss noted. He also suggested that this move would force other nations to follow suit with El Salvador already embracing BTC.

Will the outcome of the election have a major impact on #Bitcoin for the next four years?@1MarkMoss weighs in on #Harris vs #Trump 👇

Full interview: https://t.co/7G95NkxA5R pic.twitter.com/6gSEbngqvL

— Natalie Brunell ⚡️ (@natbrunell) September 23, 2024

This “game theory,” as Moss described it, would trigger a global race among nations to add Bitcoin to their reserves. It could potentially drive the BTC price to unprecedented levels. Moreover, Moss predicted that under Trump, BTC could reach $400,000 by next year.

On the other hand, if Kamala Harris wins, Moss sees a much less favorable outcome for BTC. He highlighted the Biden administration’s aggressive stance toward the crypto industry. He particularly referenced “the FED denying Bank Charters” and “Elizabeth Warren passing bills that could make it even illegal to potentially mine Bitcoin.”

With Harris in power, Moss predicted a more conservative Bitcoin price target of around $100,000 to $150,000. However, he stressed that “Bitcoin is a global asset” and will continue to thrive regardless of U.S. policy.

Impact of Liquidity on BTC’s Performance

Furthermore, Moss emphasized the strong correlation between Bitcoin price and liquidity, particularly with the U.S. M2 money supply. “As liquidity goes up, Bitcoin goes up,” Moss explained in an interview with Natalia Brunell. He pointed out that different assets respond to liquidity at varying rates.

For instance, the S&P 500 moves more slowly compared to BTC, which is far more sensitive. Moss elaborated, “Bitcoin moves at about an 8.95 times sensitivity, whereas gold moves at about a 1.45 times sensitivity.” This high sensitivity means that when liquidity expands, Bitcoin tends to surge.

Moss also cited the projected growth of the U.S. monetary base by 10% annually. Moreover, he predicted that Bitcoin price could continue climbing at approximately 90% of this growth rate. He added, “We’re right on track,” referring to Bitcoin’s performance over recent years as aligned with increasing liquidity.

Macroeconomic Environment and the Fed’s Role

Moss also touched on broader economic factors, particularly the role of the Federal Reserve. He doesn’t foresee an imminent market crash despite the inflation concerns. Also, since the Fed recently cut rates by 50 bps, the economic situation could change drastically,

On the other hand, Moss predicted an “inflationary crash,” where the cost of living skyrockets but wages fail to keep pace. “While everybody’s expecting a deflationary crash, I’m expecting an inflationary crash,” Moss said, warning that this scenario could severely reduce the standard of living for many.

However, this economic crisis could be beneficial for BTC as it is often viewed as an inflation hedge. In addition, the institutional influx into Bitcoin has surged with MicroStrategy betting another $458 million. This inflow, coupled with robust Bitcoin ETF flows of $397 million last week, could provide the much-needed boost to Bitcoin price in the short term.

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