US Election 2016: What Does It Mean For Bitcoin?
Earlier this week, history was made when Donald Trump won the 2016 US Presidential Election. And while the people of America come to terms with the fact a former WWE Superstar has been chosen to run their country, here’s how it could affect bitcoin.
What does it mean for the bitcoin industry?
In the event of a Trump victory, many people expected the bitcoin market to reflect that of Brexit earlier this year where the price of bitcoin surged over $100 (from $560 to $655), however, despite a small jump from $709 to $739 (+3.9%) as the results were announced, the price has since returned to $712.
Albeit a small increase, it comes as validation to those who argue that bitcoin is a safe haven at times of market volatility: bitcoin remained strong at the time Trump’s victory became clear, whilst the futures markets plunged.
Charlie Bilello, Director of Research at Pension Partners
In fact, if we take a look at the bitcoin market over the last 3 months (in the run up to the Election), the price has continued to climb somewhat steadily… is there a correlation or is this purely a coincidence?
I personally think people are becoming increasingly unsure about the future of their country, hence why they are buying the likes of bitcoin and gold and driving up the price. With such controversy over the Presidential Election, assets like these are seen as investments that would retain value in a Doomsday scenario where traditional fiat currencies would crash.
Trump launched his campaign back in June 2015 by announcing that he would deport 11 million undocumented migrants and build a wall along the US-Mexican border.
I would build a great wall, and nobody builds walls better than me. Believe me. And I’ll build it very inexpensively. I’ll build a great, great wall on our southern border and I will have Mexico pay for that wall. Mark my words.
How could the Great Wall of Mexico affect bitcoin? Well, buy building the proposed 1000-mile wall, it threatens the billion dollar flow of payments that Mexican-American immigrants send home to their country each year.
According to an article on The Washington Post, “Nearly $25 billion was sent home by Mexicans living abroad in 2015, mostly in the form of money transfers, according to the Mexican central bank(…)but that figure includes cash from around the world, not just the United States.”
So, could bitcoin step in to save the day? Bitcoin as a remittance service has long been a hot topic of conversation for the following reasons:
Freedom in Payment
– With bitcoin, it is possible to be able to send and receive money anywhere, anytime.
– You don’t have to worry about crossing borders, rescheduling for bank holidays, or any other limitations one might think will occur when transferring money.
– There is no central authority figure in the bitcoin network. You are in control of your money with bitcoin.
Control and Security
– Allowing users to be in control of their transactions helps keep bitcoin safe for the network.
– Merchants cannot charge extra fees on anything without being noticed. They must talk with the consumer before adding any charges.
– Payments in bitcoin can be made and finalized without one’s personal information being tied to the transactions.
– Due to the fact that personal information is kept hidden from prying eyes, bitcoin protects against identity theft.
– Bitcoin can be backed up and encrypted to ensure the safety of your money.
Information is Transparent
– With the blockchain, all finalised transactions are available for everyone to see, however personal information is hidden.
– Your public address is what is visible; however, your personal information is not tied to this.
– Anyone at anytime can verify transactions in the bitcoin blockchain.
– Bitcoin protocol cannot be manipulated by any person, organisation, or government. This is due to bitcoin being cryptographically secure.
– Currently, there are very low fees within bitcoin payments.
– Bitcoin exchanges help merchant process transactions by converting bitcoins into fiat currency. These services generally have lower fees than money transfer businesses.
However, despite the advantages of bitcoin as a remittance service, the biggest hurdle it faces at the moment is (as we all know) lack of mass adoption… but the potential is there and just imagine what bitcoin could become with $25 billion flowing through the system annually.
What does it mean for CoinCorner?
Short term: not a lot.
Long term: who knows?
With such uncertainty and instability, nobody knows for sure what will happen – my guess is as good as anyone else’s. However, one of the advantages of being a small business, considered still in it’s “early stages” means that we are in a pretty good position to react quickly and accordingly to whatever the world throws at us.