First Mover: Stimulus Winning as Biden Surges in Polls and Bitcoin Eyes $12K – CoinDesk – CoinDesk

The outcome of next months U.S. presidential electionmay not matter much forbitcoinsprice: Economic stimulus in the trillions of dollars is likely no matter who wins, bolstering the largest cryptocurrencys appeal as a hedge against inflation.

President Donald Trump over the past week hasreversed his oppositionto a newgovernment-spending bill following Aprils $2 trillion coronavirus-aid package. Hesignaled his eagerness to strike a dealwith leaders of the opposition Democratic party, who have proposed a$2.2 trillion stimulus bill. According to Axios, he told senior lawmakers in his own Republican party that he wants a big deal.

If Trump wins in November, hes likely to continue supporting stimulus spendingor easy monetary policy from the Federal Reserve, given his four-yeartrack record of jawboning the U.S. central bank to cut interest rates whenever signs of weakness appear, while boasting about U.S. jobs growth and stock market increases. He also could push for a new round of tax cuts.

Trumps Democratic challenger, former Vice President Joe Biden, has already rolled out his own $5.4 trillion agenda that includes increased budget allocations for education, housing, health care, paid leave and fixing crumbling infrastructure, according to theWall Street Journal. The Biden campaign has pledged to cancel a substantial portion of Americans$1.5 trillion in federal student debt.

Suchexpenses would come on top of what already seems like an unending sea of red ink: The U.S. governments budget deficit for the 2020 fiscal yeartripled to $3.1 trillion.And economists say the Federal Reserve is likely to keep printing money in coming yearsto help finance the budget gap.

Because the economys hands are tied and policymakershands are tied, the wiggle room that any party in power is going to have is limited, said Chris Wallis, chief investment officer of Vaughan Nelson Investment Management, a division of the French financial firm Natixis, told First Mover in a Zoom interview.Theres no atheists in a foxhole. Nobody is going toworry about deficits.

Wall Street analysts havedebatedin recent weeks whether a Trump or Biden victory would be better for stocks.Whats good for bitcoin might be easier to pinpoint, since most digital-asset market analysts say the Federal Reserves $3 trillion of freshly printed money this year hashelped to push up prices for the largest cryptocurrency.

The upshot? For voters, its a choice between Trump and Biden.But bitcoin might be a winner either way.

Chart showing year-over-year change in global central bank balance sheets (blue line) and money supply (red line).

Bitcoin Watch

Bitcoin daily chart showing six-day winning streak.

Bitcoin bulls are taking a breather, having powered gains for the sixth consecutive day on Monday. Thats the longest daily winning run since August 2019.

The momentum is likely to continue as the growing institutional participation highlighted by the payment company Squares recent $50 million investment in bitcoin has bolstered investor confidence in the cryptocurrencys long-term prospects.

Technical charts have turned bullish with the cryptocurrencys convincing move above the Sept. 18 high of $11,200.

Last, open interest in futures listed on major exchanges across the globe has increased by 20% alongside a rally in prices. Futures trading volume also doubled to $14 billion on Monday.

A rise in open interest and volumes alongside an increase in prices is said to validate the uptrend.In other words, the latest bullish move has legs.

The probability of bitcoin rising to $14,000 from current levels is stronger than the odds of a decline to $10,500, Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG told CoinDesk in a Twitter chat.

Token Watch

Ether (ETH):Cryptocurrency rallies after Grayscale (owned by CoinDesk parent Digital Currency Group) announces that Ethereum Trusthas become SEC reporting company.

Zcash (ZEC):Tokens developer, Electric Coin Company, shifts to non-profit status following stockholder vote.

Dai (DAI):MakerDAOs gambit to restore DeFi stablecoins value to $1 pegappears to have worked.

Ethereum Classic (ETC):Developers on frequently-targeted blockchain attempts modified exponential subjective scoring as latest solution for warding off 51% attacks.

Filecoin (FIL):Trading in decentralized file-storage services tokensbegins on Kraken Oct. 15, exchange says.

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First Mover: Stimulus Winning as Biden Surges in Polls and Bitcoin Eyes $12K - CoinDesk - CoinDesk