This article was written by Richard Gardner, founder and CEO of Modulus Global.
The dust has settled. Everybody in Cleveland has gone home. The press has moved on to Philly. Headlines last week included “Pray Away the Gay”, plagiarism, and an unpopular Ted Cruz. This week, Debbie Wasserman Schultz leads every story, even after she tendered her resignation from the DNC.
For the media, this political cycle has been a dream come true. Every day brings a new twist and turn. Typically casual observers now religiously tune in to catch the latest flub or campaign leak. But in the cryptocurrency world, there are real questions to be answered. The most pressing of which: what can we expect over the next year? Politics, especially in an unconventional year, is always hard to predict. But, let’s take a look at some of the clues we’ve been given.
Thus far, the motto of the 2016 cycle seems to be ‘expect the unexpected’. Donald Trump and Bernie Sanders have both tapped into the anger that voters are feeling. Economists have staked out very different positions on what a Trump Administration might mean for global markets. Some claim it would be a catastrophic blow, while others write such theories off as nothing more than hype. Let’s side-step the politics and look at the evidence.
So, what would we see from a President Trump?
The Brexit was, in many ways, symbolic. Certainly, there are real consequences to the vote. But, the underlying scare is an overwhelming threat to stability. A Trump administration would likely be viewed through the same lens, at least initially, and here’s why:
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– Donald Trump has gone to war with free trade. He’s said he wants to rip up trade agreements and re-negotiate them, putting “America First”. Many see this as the first step in an international trade war, retaliatory tariffs, and a steep increase in prices for consumers. It also means a fluctuation in the market. One thing that Donald Trump has proven so far: don’t bet on what will happen next. So, while I’m not going to predict what the end result of a Trump administration might be, I believe it is safe to say that until the markets sense stability, skittish will be the word of the day.
– Trump has taken tough stances on trade partners, including China and Mexico. Now, nobody knows, at this point, whether his palaver is indicative of his style of governing or if it is solely a campaign tactic to coalesce the support of those left behind by NAFTA and the new service economy. Until we know, we have to expect his calls for a wall along the Mexican border, as well as an end to sending money to families within Mexico, as a warning, if nothing else.
– Donald Trump has stirred the international pot. Among other items of intrigue, he has threatened a pullback from NATO and been flexible on nuclear proliferation. Now that the primary process is over, we may well see a more presidential Donald Trump. Nevertheless, he has re-framed the way we look at political speech.
What does it all mean for cryptocurrency?
On the whole, a Trump administration should, at least temporarily, provide a boon for cryptocurrencies. Until the markets feel a sense of stability, they will continue to fluctuate, and while they fluctuate, with the fear of potentially looming trade wars, cryptocurrencies should see an increase in investors looking for refuge, hedging bets against the more traditional USD and EUR. Of course, the ongoing threat of security breaches puts this potential surge at risk.
Additionally, if Trump follows through on his plans to attempt to prevent monies from being sent into Mexico through traditional means (MoneyGram, Western Union, Paypal, etc.), it may mean a whole new class of crypto-enthusiast will emerge. In a limited sense, this may expand the brand awareness of cryptocurrencies further into the general public consciousness. Of course, only after, and if, Donald Trump is elected president will we truly see what response the markets will have to his new style of politics.
Stay tuned as we cover what a President Clinton would mean for cryptocurrency, as well as a post-conventions wrap-up.