Hedge fund claims Q4 Bitcoin rally will continue regardless of US election results
Neither party has adequately addressed the country’s spiraling debt and deficit problem, which will play into Bitcoin’s hands post-election, a hedge fund manager said.
Bitcoin’s price will benefit from the upcoming United States presidential election regardless of who wins, according to the investment chief behind ZX Squared Capital.
The impact of April’s Bitcoin halving event has historically led to strong fourth quarters, and both US presidential candidates have failed to address a key issue that could play into Bitcoin’s favor, CK Zheng, chief investment officer of crypto hedge fund ZX Squared Capital.
“As both Republican and Democratic parties do not appropriately address the ever-increasing US debts and deficits during this election, this will be very bullish for Bitcoin especially post the US election.”
Bitcoin has also benefited from uncertainties regarding previous US presidential elections, and Zheng said it won’t be any different this time.
Additionally, CoinGlass data shows that Bitcoin has historically soared in the fourth quarter, rallying more than 50% six times since 2013. Years in which Bitcoin halving events occur has often boosted those gains.
During the 2020 halving, Bitcoin rallied 168% in the fourth quarter; it also happened to be the year the last US presidential election took place.
Zheng expects Bitcoin to notch a new all-time high in Q4 or soon after.
Still, Samantha Yap, CEO and founder of Web3 PR firm YAP, told that Bitcoin rallies and their resulting price rises are often the “least interesting aspect.”
“What matters is the surge in retail interest across the crypto industry that follows. Media attention often follows retail attention, kicking off a whole media frenzy. The hope for the crypto and Web3 space during these moments is that there are more usable and accessible applications ready for newcomers to adopt.”
Zheng said the Federal Reserve’s “aggressive” 50 basis point interest-rate cut could also be “bullish” for Bitcoin and risk-on assets if the US economy can achieve a “soft landing.”
Central banks aim to achieve soft landings by changing interest rates enough to prevent an economy from overheating and experiencing high inflation, but not enough to cause a downturn.
If the Federal Reserve is successful, Zheng expects Bitcoin’s price to be closely correlated with the NASDAQ.
”Liquidity is slowly being reintroduced into the market, which may set the stage for stronger price movements in the months ahead,” said Leo Fan, a founder of zero-knowledge proof generation and verification layer 1 Cysic.
“Bitcoin’s growing narrative as ‘digital gold’ and a hedge against macroeconomic instability is likely to attract more institutional capital, especially as traditional markets remain volatile.”
