Analyses of past elections on other assets tell a positive story for Bitcoin, while holders are already enjoying the benefits.

With Joe Biden ready to be the next president of the United States, Cointelegraph Consulting reflects on how traditional assets have responded to the election of a Democratic candidate. Historically, Democrats have been more favorable to Financial Peak gold, as the common perception is that more money is printed without support under Democratic leadership, further degrading the dollar. In the short term, Bitcoin (BTC) has already benefited greatly, increasing by 10% from election day to date.

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Santiment’s latest findings, published in Cointelegraph Consulting’s bi-weekly newsletter, indicate that the average earnings of Bitcoin holders over the long term are at a maximum of 14 months, which increases the likelihood that they will be able to exit the positions and make a profit.

Market to realised value, or the MVRV ratio, is an indicator that tracks the average gain or loss of a given group of holders in an effort to understand whether they are in a position to sell at a profit. Shortly after breaking $15,000 on November 5, Bitcoin’s 30-day MVRV ratio, or the average ROI of all directions that have purchased BTC in the past 30 days, shot up to 18.8%, indicating that short-term BTC holders were averaging about 20% profit on their initial investment.

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Other metrics in the chain show that Bitcoin whales have been accumulating BTC in the period leading up to the last push of over $15,000. The collective balance of addresses that have 10 to 100 BTCs hit a six-month low on September 20 before beginning to recover, and has grown by 37,800 BTCs since then, signaling renewed confidence in the asset.

Other news from around the world of legislative and corporate blockchain showed that one of China’s largest banks launched a new blockchain-based bond using tokenized certificates. In the US, the Securities and Exchange Commission is having a record year with over $1.26 billion raised from unregistered ICOs in 2020.

Read the full edition of the newsletter here for the full scoop, with detailed graphics and images.

Bitcoin’s price has barely been higher than now for 12 days since it was created
Cointelegraph’s Market Insights newsletter shares our knowledge about the fundamentals that drive the digital asset market. With the market intelligence of one of the industry’s leading analysis providers, Santiment, the newsletter is immersed in the latest data on social media sentiment, chain metrics and derivatives.

Stablecoins could provide market participants with a cost-effective means of balancing their capital in the world’s wild markets. In the last year, three major financial supervisory bodies have expressed concern about the threats to financial stability allegedly posed by stablecoins.

While recognizing the potential for increasing the efficiency of payments According to reports from the Bank for International Settlements, the United States Federal Reserve and, more recently, the Financial Stability Board, many risks are highlighted under the banner of „financial stability“.

The concern is with global stablecoins, which they define as having „potential reach and adoption across multiple jurisdictions and the potential to achieve substantial volume. The ESB report included a glossary of definitions of key terms, although none were provided for „financial stability“.

Why will stablecoins be crucial for the future?

What does financial stability mean?
The simplest way to conceive of financial stability is as an absence of instability. The global financial crisis of 2007-2008 marked the epitome of modern financial instability.

It was in response to this crisis that the G-20 leaders established the Financial Stability Board in 2009. Hosted and funded by the BIS, it oversees the global financial system, coordinating the work of national financial authorities and other global bodies.

Its stated objective is „to address vulnerabilities affecting financial systems in the interests of global financial stability“. Preventing another event similar to the 2008 financial crisis is presumably the main purpose of this body.

The 2008 financial crisis

The 2008 financial crisis is best explained as the inevitable result of a prolonged failure to discover prices in the residential mortgage credit markets. Because, by then, sub-prime mortgage securities were worthless, according to their analysis, and yet they were rated AAA.

Despite being the best positioned to perform credit analysis. Mortgage originators had strong financial incentives to turn a blind eye. Despite having the strongest financial incentives to perform credit analyses, investors in sub-prime mortgages were in an impossible position to do so.

Thus, the pricing mechanism in this market was totally inhibited by a widespread blind confidence in AAA ratings.

As demand for high-yield sub-prime securities grew enormously without regard to the creditworthiness of residential borrowers, a painful „repricing“ of these assets became inevitable.

The antidote to systemic financial risk is to facilitate and maintain healthy pricing mechanisms in widely owned asset markets. This objective is aided by the presence of sophisticated market participants: those who do not depend on rating agencies to allocate capital.

These entities play a major role in the price discovery mechanism, but their work is not easy. They need a Cryptosoft cost-effective means to quickly move and rebalance their capital in global markets. This is where stablecoins come in.