Gold prices have dropped nearly 5% while Bitcoin surged 30% following the recent U.S. election. This market shift is attributed to expectations of Republican policies potentially driving economic growth and inflation. While gold’s decline is linked to a strengthening U.S. dollar, Bitcoin’s rise is fueled by its appeal as a hedge against inflation and its growing acceptance in mainstream finance.
Gold down, Bitcoin up! How Trump’s victory changed financial market dynamics
Since the US presidential election on November 5, financial markets have witnessed a notable shift in the behavior of traditional and modern hedges against economic uncertainty. Gold, a classic safe-haven asset, has seen a decline of nearly 5%, while Bitcoin, the world’s largest cryptocurrency in value terms, has surged approximately 30%.
According to a research note by Gavekal Research, this divergence can be attributed to market perceptions of the policy implications of the Republican Party’s electoral victory. The report notes, “Clearly market participants have concluded that the Republican Party’s victory is negative for gold and positive for Bitcoin and other cryptocurrencies.”
