A market study conducted by research and analysis firm Juniper speculates that bitcoin valuation will spike this year, citing the prospect of a Trump presidency in the US. Furthermore, the study finds that bitcoin transactions are speculated to exceed $92 billion in valuations this year, more than tripling the $27 billion value scaled in 2015.
If presumptive Republican presidential nominee Donald Trump wins the U.S. presidential elections, the ensuing turmoil on world markets could lead to bitcoin thriving in such an environment, states a new study by Juniper Research.
“If Donald Trump becomes President of the US, there is the very real prospect of turmoil on world markets – the Economist Intelligence Unit ranks his Presidency within the Top 10 global risks,” wrote research author Dr. Windsor Holden.
Notably, he added:
However, Bitcoin would thrive in such an environment, at least until the impact on major fiat currencies becomes clear.
To draw a parallel, economic and geopolitical uncertainties in Greece last year led to a bitcoin rally at the time. The price of the cryptocurrency took a fall later in the year when a pro-EU party won the majority vote during the country’s elections, influencing bitcoin price yet again.
Uncertainties with a Trump Presidency
The Economist published an assessment in March 2016 wherein an analysis of Trump’s policies, or lack thereof in their clarity, was among the top 10 global risks facing the world, beyond the economic landscape.
At the time, The Economist ranked and analyzed the factor with the following indicators:
Moderate probability, High impact; Risk intensity = 12
In its latest revision of the Trump presidency factor on June 15, those indicators had changed:
High probability, High impact; Risk intensity = 16
Some of the global economy-centric takeaways from the Economist’s analysis are:
- “He has been exceptionally hostile towards free trade.”
- “Has repeatedly labelled China as a “currency manipulator.”
- “Alienation of Mexico and China in particular, could escalate to rapidly into a trade war.”
Factors Behind Bitcoin’s Gains in 2016
A press release by Juniper also attributed the rise in bitcoin price to three key factors.
- The uncertainty of Brexit, pre-Brexit: Observers and economists have frequently pointed to conditions of economic and political uncertainty and instability as reasons for investors to look for safe havens. “Bitcoin’s price rose in the weeks leading up to the referendum, dipped briefly but sharply when it appeared that Britain would vote to remain in the EU, before recovering when the true result became apparent,” the research report read.
- A Weakening Chinese Economy: A stuttering economy, weak forecasts and a fall in the value of the yuan have led to economic uncertainty among Chinese investors flocking to bitcoin as a store of value. One major Hong Kong English daily deemed Bitcoin as China’s “new darling”.
- The Upcoming Halving: The imminent block reward halving that is expected to occur before around July 10th will see the supply of bitcoin reduced. Along with plenty of other market speculators, the research also sees bitcoin price spiking higher as a result of the halving event.
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