Donald Trump’s historic victory in the 2016 US presidential elections predictably and immediately hammered the value of the dollar on foreign currency exchange markets. But, for cryptocurrencies, the news had an equal and opposite effect.
Coindesk reports the value of Bitcoin started rising steadily as the vote count began. Bitcoin is now trading up 3 per cent on news of the Trump win, with the price of one BTC hitting a high of $740 — up from a high of around $710 yesterday.
Even newbie cryptocurrency Zcash appears to be having a bit of a Trump bump, although trading remains volatile given the new privacy-focused digital currency only launched at the end of last month.
Gold is also doing well.
Bitcoin and gold also experienced a surge in value this summer after the UK’s Brexit referendum result on leaving the European Union — another political upheaval that pollsters had failed to predict.
Commenting on the similarities between the cryptocurrency and the precious metal, forex market news site DailyFX wrote in July: “[T]he spirit behind buying gold and buying bitcoin appears to be very similar. In a ‘doomsday scenario’ where you desire an asset to hold value while other fiat-priced assets are plummeting in value, BTC like Gold is ideal for bartering. The difference is that BTC can allow bartering to be done digitally thanks to the blockchain.”
Whether the election of a rank outsider to the White House can be described as a “doomsday scenario” remains to be seen. Certainly it upsets the establishment apple cart. And injects the adrenaline of uncertainty into traders. Although the dollar looks to have pared back some of its initial losses after Trump’s emollient acceptance speech — in which he reiterates his pledge to kick start infrastructure projects and create jobs.
But what’s clear is that when politics defies conventional expectation, and when very many best laid plans are laid to wrack and ruin, cryptocurrencies are acting as a haven and a hedge against uncertain times — alongside the traditional one: gold.