ZX Squared Capital head: Bitcoin will grow regardless of the outcome of the US election

The material is not an investment recommendation and is published for informational purposes only.

What’s new? The head of the investment company ZX Squared Capital, CK Zheng, believes that the price of bitcoin will benefit from the November presidential election in the United States, regardless of the outcome. He also noted that historically, in years when the bitcoin network has been halving, the asset’s price has risen in the fourth quarter.

Material by Cointelegraph

What else is known? Zheng also noted that both major presidential candidates, Donald Trump and Kamala Harris, have failed to address a key economic issue that could play in bitcoin’s favor.

The entrepreneur believes that neither the Republican nor Democratic parties will adequately address the ever-increasing national debt and budget deficit, which could contribute to BTC’s rise, especially after the election.

Halving on the bitcoin network is a programmed event, it occurs every four years since the asset’s launch and halves the reward to miners for mining blocks, slowing issuance and reaching the maximum limit of 21 million coins. In April this year, the reward was cut to 3,125 bitcoins per block.

According to Coinglass, bitcoin has historically grown in Q4, and growth has often picked up in halving years. In 2020, for example, the growth rate was 168%. In addition to the halving year, the previous US presidential election took place in that year.

Separately, Zheng noted the sharp easing of monetary policy by the US central bank. Thus, earlier this month, the Fed cut the rate by 50 basis points for the first time in 4,5 years. This was preceded by a cycle of increases, as a result of which it reached a 20-year high of 5,25-5,5% in July 2023. According to the entrepreneur, the rate cut could also stimulate bitcoin and other risky assets.

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Zheng said that growth is possible if the Fed manages to strike a balance: change the rate enough to prevent inflation and overheating of the economy, while not causing an economic downturn. In that case, there could be a high direct correlation between bitcoin and the US stock market.