Legacy Markets have been on a consolidation level ever since reaching their all-time high back in September. This extended uptrend came after the Corona Virus Market crash and adjusted from the lows of 23rd of March 2020.
The US Elections – a Crucial moment for everyone
Be it investors, traders, or normal citizens of the world…everyone is eying the results of the US elections. The US policies are known to interfere in global issues, even if they don’t relate to them directly. The Democrats and the Republicans have a major difference when it comes to policing the world, so it’s very natural to see people across the world root for the party which is doing better for them. Just yesterday, the current President Donald Trump retweeted a video of a parade in Nigeria supporting him!
A parade for me in Nigeria, a great honor! pic.twitter.com/EHiSQMFvSZ
How did the Markets react in the previous election?
Back in 2016, Trump won the presidential race against his tough opponent, Hillary Clinton. When the results were announced, reactions were mental from the democratic people, signaling a failed state. On the contrary, legacy markets recorded huge gains and markets were all up for the day, and kept on an uptrend, until the recent Covid-19 crash.
Similarly, Bitcoin was up as well, though lagging for a couple of days before continuing its uptrend.
What are the possible scenarios & how to prepare yourself?
Trump is known to be corporate-friendly, meaning he lowers the taxes on corporations for them to be able to expand and employ more Americans. Companies love the Donald. He doesn’t care about the environment, thus he doesn’t impose any Green Sanction, which usually comes at a very high cost. That’s why stock markets should go up if Donald Trump wins the 2020 US elections. In parallel, in our last article, we discussed how the crypto market has been highly correlated with the US equity market and is expected to also rise in value in the long run if Donald Trump ends up winning.
On another hand, a Biden win would most probably cause a stall in the stock market in the short run. More corporate taxes will be imposed, Green Sanctions and US companies will look to incorporate elsewhere. Nonetheless, this might motivate crypto enthusiasts to turn from Legacy Markets and invest more in the Cryptocurrency market.
To sum up, Crypto investors and traders should beware of multiple selloff areas, and be ready to shuffle their portfolios, as a strong selloff might instigate fear in all markets. For traders who are looking to buy today, it is advisable not to do so and wait after the US elections for price confirmations, to see where the markets are heading and set the correct Stop Loss levels. Check out our previous article that explains how to correctly enter the market with proper risk management.
Stay Ahead, Stay Updated
Rudy Fares