Morgan Stanley analysts expect that the delay in official election results for the upcoming US presidential election will trigger a new wave of volatility that could affect the cryptocurrency market.
In a recent report on the US presidential election and financial markets, analysts Monica Guerra, head of policy at Morgan Stanley, and Daniel Kohen, US policy strategist at the same firm, anticipated that the political event, which will take place on November 5, will cause a high degree of concern in the financial sphere, including the cryptocurrency market.
The firm's analysts warned that Market volatility could intensify in the short term due to the possibility that election results will be known with some delay., as has happened in the past. According to the report, this uncertainty, together with macroeconomic and geopolitical factors, could significantly affect investor sentiment and overall asset performance.
In the United States, election results are generally not known on the day of the election, creating an environment of speculation and uncertainty that has historically caused sharp movements in financial markets.
In particular, analysts noted that the CBOE Volatility Index (VIX), known as the market's "fear thermometer," has shown significant spikes in previous election cycles, such as 2020.
Electoral uncertainty will impact the cryptocurrency market
Based on their report, the analysts highlighted that The volatility that financial markets have experienced during election years is a common trend and that this year will be no exception. They also indicated that the current context suggests that 2024 could be especially volatile for assets, not only due to the possible delay in election results, but also due to the mix of contradictory economic signals that complicate the prediction of election results.
Guerra and Kohen stressed that voters' perception of the economy can influence the election resultsWith 63% of consumers concerned about inflation and the economic situation, the climate of uncertainty could lead to more cautious investment decisions.
Growth expectations for 2025
Despite the volatility predicted by Morgan Stanley for financial markets in the short term, while the official election results are known after the November 5 elections, other market analysts also estimate that the value of cryptocurrencies, especially Bitcoin, could be boosted regardless of who is elected president of the United States.
In this regard, JPMorgan, which maintained a relatively cautious stance towards cryptocurrencies this year, estimates that 2025 could be positive for the growth of digital assetsThe bank believes that a possible victory of Donald Trump could boost the market with clearer and more favorable regulation. In addition, it noted that geopolitical tensions could also influence the growth of the crypto market, due to the fact that Cryptocurrencies are currently perceived more as safe haven assets, which is why many investors are turning to them to protect themselves from instability.
Likewise, Brad Garlinghouse, CEO of Ripple, commented last week in an interview with CNBC that he believes that both a Donald Trump-led administration and one with Kamala Harris at the helm will boost the cryptocurrency market, each in its own way. “We are going to see progress and I am certainly looking forward to that”, Garlinghouse said in the interview, noting that Trump has committed to the crypto community to drive industry development and innovation and that Harris has a long pro-technology record, so she could also favor the healthy development of cryptocurrencies in the country.
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