Prior to the 2017 French Presidential election which came to a conclusion on May 7, there has been a lot of talks around then Presidential candidate Marine Le Pen and her mid-term strategy to detach France from the European Union (EU). Emmanuel Macron, the current president-elect who defeated Le Pen in the second round of the election, proceeded his campaign with expressing his strong support toward keeping France in the EU.
Several analysts suggested that Le Pen’s election could bring about a massive influence on bitcoin price and create surging upward trend in the short-term, considering that if elected, Le Pen would have urgently pushed for Frexit, the country’s exit from the EU. As seen in the effect of Brexit in Britain’s finance and fintech industries, analysts predicted that France’s potential exit from the EU with Le Pen as President would lead to a massive upward trend for bitcoin price.
On May 7, Emmanuel Macron secured a decisive victory over Le Pen, successfully obtaining 66 percent of the votes and as a result, the one-month long deliberation of Frexit came to an end.
However, during the election period, which lasted for 14 days from April 23 to May 7, some analysts including Willy Woo, the moderator of cryptocurrency investment data provider Woobull, claimed that the election of Le Pen and her strategy to take France out of the EU would have led to a significant alteration to bitcoin’s short term price trend.
Theoretically, a Frexit would have led to a domino effect throughout Europe and EU, similar to the effect the election of current US President Donald Trump had on international markets including Australia and South Korea.
Trump’s election did demonstrate a significant impact on bitcoin’s price trend. Investors and traders moved on to bitcoin and bought the digital currency as a safe haven asset to protect themselves from potential economic uncertainty and financial instability. In a relatively short period of time, bitcoin volumes and price surged, which maintained for several months after the election.
The US election had a large effect on bitcoin price due to its connection to the Chinese and South Korean markets. The US itself operates the second largest bitcoin exchange market with a 25 market share over the global bitcoin exchange market and South Korea and China hold approximately 15 percent of the global bitcoin exchange market share. Hence, the election of Donald Trump affected 40 percent of the global bitcoin exchange market and led to a mid-term surge in bitcoin price.
As shown in the chart below, Europe in contrast holds only 7.6 percent of the global bitcoin exchange market share. The bitcoin trading volume of all European countries is smaller than that of the Chinese bitcoin exchange market, which is still behind Japan and the US.
Thus, even under the assumption that the initiation of Segwit would have had a domino effect throughout Europe and the EU, the impact of Frexit would have been minimal on bitcoin price in consideration of current circumstances.
Featured image from Shutterstock.
Last modified: June 12, 2020 3:50 PM UTC