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2024 might be one of the busiest and most influential years in a while. The entire world runs elections, the Bitcoin halving is shaking the market, and AI might be the reason why many people will be jobless. Overall, 2024 is a mess, but all these occurrings can affect one another, influencing the outcomes.
For example, since the elections will happen almost globally and many things will change, the cryptocurrency market can experience troubles or a boost in popularity and expenditures, depending on several factors. Regardless, the price of Bitcoin will be a prominent sign of how the crypto market will evolve, so monitoring it to buy Bitcoin p2p is essential for investors to prepare.
The US elections and the fight between Democrats and Republicans are another decisive element that can change the crypto ecosystem. So, what are some possible scenarios?
Republicans most likely to pass on crypto regulations
Experts discussed the idea of controlling the crypto environment by both parties, and there may be a possibility that Republicans can fully control crypto, whereas Democrats will handle it in a divided approach. Some people are optimistic about Trump’s outlook on crypto as he was open to exploring NFTs. However, the person who will be chosen as leader of the House Financial Services Committee will matter the most.
On the other hand, if the Democrats receive more power, development in the sector will most probably be slow, like in the past. In this case, those behind the Senate Banking and the Urban Affairs Committee will weigh the decision on crypto legislation.
Energy policies to impact mining and prices
The energy policy sector has faced several challenges in the past years, but recent investments could pave the way for innovation in energy transition technologies like clean hydrogen and carbon capture.
However, depending on electricity costs, new energy policies might take some time to implement and show results, especially for regular customers. Since they can affect usage, crypto mining might become more expensive than it is already. In addition to the Bitcoin halving, which decreases the mining reward, users might have to look deeper into places with low energy prices to continue their operations.
The election cycle doesn’t affect Bitcoin
Another interesting opinion about the election is that its trajectory won’t affect the Bitcoin price because the cryptocurrency is not affected by politics and cannot be led in the same way as a regular financial service.
At the same time, Bitcoin has plenty of recent projects that are more interesting than the underlying asset, from BTC ETFs to Ordinals, which promote portfolio diversification, increased liquidity and less risky exposure to the market. The only way one global election could affect Bitcoin would be to trigger a massive change to the economic system.
Users’ opinions will matter
Many investors worldwide expect to include more cryptocurrencies in their portfolios in the future, meaning they’ll prioritize candidates who are knowledgeable and least interested in regulating Bitcoin and other similar assets.
At the same time, candidates must consider discussing the impact of AI on the working system because it may be possible for the technology to be used to replace the human workforce, which would trigger many problems in the future. Therefore, future leaders must find a way to provide a balanced approach between accepting AI and offering people employment.
Investors must be prepared
Regardless of who wins, investors should be prepared for both negative and positive outcomes. In case elections favor crypto regulations, users can expand their crypto activities and even make a living out of it. However, not all countries will be lucky enough to elect people who understand crypto, which may lead to further restrictions.
If crypto becomes illegal in a country, people can still invest in it. Still, they’ll risk financial penalties and criminal charges, which may not be worth it for beginner investors, for instance. That’s why many investors have advocated for change for some time, because waiting for regulation can be quite challenging for areas where crypt is prohibited. At the same time, investing in other asset classes like stocks and bonds doesn’t offer enough market exposure.
How to build a strong portfolio for the future
Preparing for the future means growing your portfolio properly to help withstand any challenges. Ideally, users invest for the long term through a strategy called “buy and hold” that implies all cryptocurrencies bought are held in the portfolio for longer to gain more value.
Other ways to strengthen your portfolio include the following:
- Market timing means closely following cryptocurrency price trends and making predictions with the help of professional software;
- Diversification means spreading investments over multiple types of cryptocurrencies and assets;
- Dollar-cost averaging involves allocating a specific number of assets to the portfolio periodically;
The 80/20 rule vs the 70/30 strategy?
Besides preparation, investors must still continue their operations until new legislation is provided, but growing the portfolio faster can be done through the 80/20 method. Basically, 20% of the portfolio’s assets should provide 80% returns, but this rule can also apply to losses and holdings. Still, if 20% of one’s assets would include cryptocurrencies like Bitcoin and Ethereum, it may be possible to constitute great returns.
On the other hand, the 70/30 method is a more aggressive way to gain high yields because investments in stocks are much higher than bonds, exposing users to great risks. The rule can be used with cryptocurrencies as well, but only if governments would rule them in the same way as with stocks and bonds.
Final considerations
2024 is an important year for worldwide candidates for the presidency and other positions, making it the year of supposed massive changes in politics. The next months will influence laws on healthcare, law and infrastructure, but can also affect the industry of cryptocurrencies since new regulations can lead to investment restrictions or development. At least in the US, the fight between Republicans and Democrats will be decisive regarding Bitcoin’s and other coins’ innovation in the country.
