Bitcoin braces for Q4 gains amid US election uncertainty and halving impact

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Bitcoin price is set to benefit from the upcoming US presidential election, regardless of the winner, according to CK Zheng, chief investment officer of crypto hedge fund ZX Squared Capital.

Zheng’s prediction points to the historical impact of Bitcoin’s halving events leading to a strong fourth quarter, along with the failure of both US presidential candidates to address key economic issues that could play in Bitcoin’s favor.

For context, Bitcoin is up over 20,000,000% since 2011, far outperforming major US stock indices. The Nasdaq 100 rose 541%, while other major US stock indexes rose 282% over the same period. Each year, Bitcoin’s return averaged 230%, which is 10 times higher than the next best index, the Nasdaq 100 Index.

Crypto alpha has previously benefited from uncertainties arising from the US presidential election before the winning party is declared, and Zheng believes this trend will continue. Data from CoinGlass indicates that Bitcoin has historically surged in the fourth quarter, rising more than 50% six times since 2013. Years of Bitcoin halving events have often boosted these gains even further.

“(…) Both the Republican and Democratic parties are not properly addressing the growing US debt and deficits during this election, this will be very bullish for Bitcoin, especially after the US election,” Zheng claims.

Historical contexts

During the last half of 2020, which coincided with the previous US presidential election, Bitcoin increased by 168% in the fourth quarter. Zheng expects Bitcoin to hit a new all-time high in Q4 or soon after.

Zheng also noted that the Federal Reserve’s potential “aggressive” 50 basis point interest rate cut could be “bullish” for Bitcoin and risk assets if the US economy gets a “soft landing.” This economic scenario occurs when central banks adjust interest rates enough to prevent overheating and high inflation without causing a downturn.

Based on recent data, Bitcoin is trading at $64,400, down 2% in the last 24 hours. The upcoming election and halving event continue to generate speculation about the cryptocurrency’s future performance.

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