"Not sure what to expect exactly..."
That the sentiment of at least one major bitcoin exchange executive yesterday as Americans took to the polls in what the New York Times would ultimately call a "stunning repudiation" of the political system. Hours later, Donald Trump, the billionaire and former reality TV star, was elected president, but the markets had already responded.
As reported by CoinDesk, many traders were expecting a Trump upset to boost the bitcoin markets, with some comparing it to a "Brexit" scenario for the global markets. In that surprise political turn, the price of bitcoin ranged sharply, trading from a low of $550 to a high of $650 when the final decision was announced.
However, last night's trading wasn't exactly the same story retold.
Data from wallet provider Blockchain indicates that USD exchange volume reached an annual high during the days preceding the Brexit, though this also coincided with a planned change to bitcoin's reward generation scheme.
By contrast, USD trading was muted in the days preceding the presidential election, and even the bounce many traders were expecting proved smaller than might have been anticipated.
Over the past 24 hours, the price of bitcoin rose from $709 to a high of nearly $740, though at press time, the price had declined to $725.
Despite this, though, it was still within striking distance of annual highs set in mid-June.
At press time, the price of bitcoin was up 67% from the $434-mark in January.
Safe haven status unsure
Yet, while Trump's victory was unexpected, the resulting boost to bitcoin doesn't appear to have done much to change the view of industry analysts.
Needham & Company's Spencer Bogart, whose firm issues periodic projections for the price of bitcoin, told CoinDesk there was unlikely to be a shift its short-term projections. Earlier this year, Bogart forecast bitcoin as likely to rise to a high of $848 on improving fundamentals and progress on its core technology.
Still, Bogart said that the bump served to underscore the idea that bitcoin is becoming a safe haven asset, even if he said the evidence isn't entirely there yet.
"It’s another data point that further reinforces the notion that bitcoin rallies in 'risk-off' scenarios such as geopolitical uncertainty. By adding to this track record, the probability increases that bitcoin will continue to do so going forward," Bogart said.
Wedbush Securities director of research Gil Luria added that he does not believe bitcoin is yet correlated with other asset classes, including stocks, bonds, currency and real estate.
"I do not believe there is evidence that bitcoin is counter-cyclical or moves in the opposite direction of other assets, and I am not yet convinced that we should refer to bitcoin as a safe haven asset," he said.
Overall, the muted response, analysts said, was likely due to the fact that bitcoin is still broadly perceived as a high-risk investment.
"Bitcoin has plenty of risks that are unique to the technology, which is why it is best suited for investors that understand those risks," Luria said. "I consider a safe-haven asset an asset that has inherent downside protection, which I do not believe bitcoin will have any time soon."
Still, there was a belief that behaviors such as last night's increase on election results could do much to change that perception, cementing bitcoin's use case as a store of value, if not an off-risk asset.
"With events like today, we're seeing bitcoin perform as a safe haven, risk off asset in times like this," Mark Lamb, CEO of bitcoin exchange Coinfloor, said.
Yet, he went on to acknowledge it's unclear exactly how to classify bitcoin as of yet.
"The fact that bitcoin grew massively in 2013 and is also growing in times of the 'Brexit' and Trump seems to demonstrate that bitcoin is uncorrelated," he said.
As mentioned by analysts, it's perhaps the unique qualities as well as the accessibility of the digital currency markets that will perhaps help them become more interesting to mainstream investors.
"We see these aspects as highly favorable for bitcoin as an investable asset."
Trump image via Twitter