The U.S. Dollar Index (DXY) took a dip into the red following the 2018 midterm elections, but its digital currency counterpart Bitcoin eked out a slight gain, rising 1.40% in the last 24 hours. Democrat wins in governor races within California and Colorado could bolster the leading cryptocurrency moving forward.
Political gridlock as a result of the Democrats regaining control of the House and Republicans maintaining majority in the Senate fueled speculation that decreased fiscal stimulus would devalue a greenback that has been rising for most of 2018.
“While it is tempting to say that this result was already priced in, we do think a divided Congress does have some important implications for the dollar going forward,” said ING’s global strategy chief Chris Turner. “The vastly reduced chances of fresh US fiscal stimulus will re-emphasise the US as a late-cycle economy heading into 2019 (along with a flat or even inverted curve) and suggests to us the dollar will top out in the 3-6 month window rather than a 6-18 month window, which would have been the case on a fresh tax cut.”
Meanwhile, Bitcoin got a mild boost to its current level of $6,534.10 as of 3:15 p.m. ET, while victories in key governor races in California and Colorado could give the digital currency more support.
In Colorado, Democratic candidate Jared Polis bested Republican Walker Stapleton in a tight race. Polis is apparently an ardent supporter of Bitcoin’s underlying technology blockchain.
“My goal is to establish Colorado as a national hub for blockchain innovation in business and government. I believe strong leadership will put Colorado at the forefront of innovation in this sector—encouraging companies to flock to the state and establishing government applications that save taxpayers money and create value for Colorado residents,” Polis wrote.
The election of Polis pleased director of communications at blockchain advisory research firm Coin Center Neeraj Agrawal, who was excited “to continue our work with him and the Colorado Blockchain Council to promote sound cryptocurrency policy in the state.”
In the meantime, California’s governor race saw Democratic candidate Gavin Newsom defeat Republican John Cox. Newsom tweeted in the past at Polis about Bitcoin, so his support of the cryptocurrency in any future legislation could be expected.
Hey @jaredpolis, thanks for leading the way. My mission? To raise more #bitcoin than you. Game on?
— Gavin Newsom (@GavinNewsom) May 20, 2014
Related: The Key to The First Bitcoin ETF
For more information on the cryptocurrency market, visit the Bitcoin category.