America looks forward to a big day tomorrow, and it will have a huge impact on the world of cryptocurrencies.
US politicians have been passing legislation regarding digital assets. The US midterm elections will change the people who write and approve those laws.
Thus, investors are anxiously waiting for the results. Here are some of the possibilities for their assets.
What are the US midterm elections?
Photo Credits: www.coindesk.com
We should ensure that readers understand the US midterms before we continue the discussion. The United States will hold elections for its Congress on November 8, 2022 (PST).
That is the 9th of November in the Philippines. Congress has two parts: the House of Representatives and the Senate.
As its namesake, the midterm elections occur every two years in the middle of the president’s four-year term.
Congress is the United State government’s legislative body. The House votes on the laws it would pass, while the Senate may approve or block them.
Based on these functions, it is easy to see the connection between crypto traders and the midterms. The elections would likely affect how US citizens use bitcoin and other cryptocurrencies.
How will the 2022 midterms affect crypto?
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One unique aspect of cryptocurrencies is the lack of long-term data. We cannot say how the assets will move because it has only been in the mainstream for a few years.
Yet, we could gauge its performance based on the stock market since it closely relates to the crypto market.
Due to mounting uncertainty, the stock market tends to decline as the midterms approach. Surprisingly, the crypto market has been rising as the elections get closer.
For example, Bitcoin, the largest cryptocurrency in market capitalization, rose from $20,500 on November 1 to $20,612 on November 8, 2022.
According to Cointelegraph, the crypto market has become more stable than the stock market in July 2021.
It seems the current economic downturn has persuaded investors to avoid conventional assets. The United States has two major political parties: the Democrats and the Republicans.
The former holds most of the Senate seats, while the House has a democrat majority. Democrats have passed many crypto laws, so a Republican win would likely benefit investors.
If the Republicans win the Senate, they will replace Sen. Sherrod Brown, an outspoken crypto skeptic, with Tim Scott.
Scott is a wild card since he has not shared his plans for digital assets. Moreover, Republicans would likely win back the House.
If that happens, Patrick McHenry will become chairman of the Financial Service Committee. Crypto investors prefer him due to his support for tech startups.
The end of the midterm elections would likely result in a crypto market rally. It would provide the information that investors need to readjust their portfolios.
Conclusion
Crypto traders and the Midterms have a close relationship. The elections shift the prices of digital assets before, during, and after the results come.
A Republican majority for the House of Representatives and the Senate would likely create a positive environment for crypto investors.
However, leaving your portfolio’s performance with the elections would not be a good idea. Instead, you should consult your financial advisor to plan your assets.