Bitcoin could hit a new year-to-date (YTD) high, abetted in part by the risks surrounding the US presidential election.
The analogy takes cues from a quarterly commodity outlook published by Citigroup. The American banking giant specifically based its report on gold and its potential behavior amid the election season this November. It noted that the precious metal may rise to a new yearly high, stating that the market is underplaying the asset’s ability to grow against the election’s uncertainty.
Bitcoin, which has erratically tailed the gold market since March 2020, fell this week against a similar geopolitical outlook. The cryptocurrency briefly touched $10,100 as the Federal Reserve Chairman Jerome Powell warned about their inability to support the US economy without the second coronavirus stimulus package.
The US Congress delayed the long-awaited financial aid as the Democrats and Republicans argued over the size of the help. Many economists and analysts anticipated that the second stimulus package won’t arrive before the presidential election.
— CNN Politics (@CNNPolitics) September 23, 2020
The said delay appeared even as the US reported a historically high unemployment rate, a rise in the number of bankrupted small and medium-sized businesses, a resurgence in coronavirus cases. That further led investors to park part of their capital back into the US dollar.
It overall reduced the appeal of other safe-haven and risk-on assets. As a result, Bitcoin, gold, and stocks gave up part of their gains to the stronger dollar outlook.
Bitcoin-Gold-DXY correlation. Source: TradingView.com
But for Citibank, there is still room to grow, at least for gold. The bank wrote in its report:
“The election could be an extraordinary catalyst for gold flat price and…