How Will January Georgia Senate Election Influence Bitcoin Value?

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Last Updated on 23 March 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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The US election season hasn’t run its course just yet. Although you may think that the Joe Biden win solved everything, there is still the little matter of Senate control to be settled. According to many analysts, this could severely influence the price of Bitcoin (which just yesterday passed the $20,000 threshold and just now the $23,300 mark) as well. We explain.

As we said on 14 November already, former crypto CEO Kelly Loeffler (she used to run crypto trading platform Bakkt) is the Republican senate candidate for Georgia. She seems to be the key player that the US politics deserve at this point.

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Georgia and Bitcoin

She needs to win a tight runoff race on 5 January 2021 if the party of US President Donald Trump wants to maintain its hold on the Senate. If the Republicans lose, the Democrats would control both the House of Congress and the Senate and could basically do whatever they want for the next four years.

According to crypto study agency Messari, a Democrat win in Georgia could thus greatly influence the price of Bitcoin, because money printing would go out of control. As the value of the US dollar influences the value of Bitcoin (Wall Street investors see Bitcoin as a hedge against inflation), this does make sense.

It is probably because of this that republican backers on Wall Street have started donating millions to Ms Loeffler (whose husband is the director of the New York Stock Exchange). Newspaper The Guardian reported this week that reports show that over $400m on ads has been spent or booked so far in Georgia by the candidates’ campaigns, their parties and outside backers.

For a simple state race, that is an astonishing number. But when you realize the possible consequences of the Democrats winning, that might not be too surprising.

Brrr

Messari’s Crypto Theses Report for 2021 contains a lot of hypothethicals and few certainties, and at some 130 pages it is quite the read. But it does contain some interesting conclusions indeed.

Just as global business newspapers the Wall Street Journal and the Financial Times have already admitted, the recent rise of the stock market was not so much due to incredible performances by companies as it was due to the Federal Reserve turning on the money printers. As most people are not too worried about their US dollar deflating against the Euro, the Japanese Yen or the British pound for the moment, it is indeed a possibility that a Joe Biden presidency, if it gains control of the senate, would choose to “print” it way out of the economic hardship it finds itself in.

Messari stated:

If Democrats sweep the runoff elections in Georgia this January, it will improve the prospects of an unchecked fiscal stimulus package and add more fuel to the speculative fire around bitcoin and other financial and hard assets.

What’s different today from several years ago is bitcoin’s prominence in the macro conversation, and its emergence as a smart money alternative to gold.

Translated that means that if the Democrats win in Georgia, the Federal Reserve money printer could be making a whole lot more Brrr sounds in 2021 as well, according to Messari. With investors then looking for safe havens to store their moneys and protect these from inflation, Bitcoin would indeed greatly profit.

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