Chaos on Capitol Hill Pushes Bitcoin Ever Further

As protestors stormed the Capitol building on Wednesday, Bitcoin’s price reached new highs as did stock markets. We explain why.

In brief

  • Protestors stormed Capitol Hill after Democrats win Georgia Senate.
  • Bitcoin hits new record highs as S&P closes at record highs.
  • Increased fiscal spending is seen as a key reason for optimism in the markets.

It was an odd day for Bitcoin to be breaking more records. On Wednesday, the state of Georgia had turned blue, giving the Democrats majority control in the Senate and paving the way for President Biden to have a free hand in enacting new policies. 

A few hours later, as the Senate was about to certify the election results in Washington DC, an angry mob broke in to disrupt proceedings. 

While both events were happening, Bitcoin’s momentum picked up quickly. As news broke of the Capitol building being stormed, around 7 pm GMT on Wednesday, Bitcoin’s price jumped from $34,493 to $36,095 within an hour and kept climbing. 

Ethereum’s price had a similar sharp uptick during that critical hour lifting the whole market to the $1 trillion mark for the first time in its history. Coincidence? Not exactly. What happens in US politics has a profound effect on cryptocurrency prices. 

As we’ve argued several times before in Market Watch, US market movements are becoming more correlated with what happens with Bitcoin. The reason? The institutional investors and hedge fund managers that have moved into the space have skin in both games: that of the US economy and that of Bitcoin. As a result, their performance is drawn closer as investors treat Bitcoin like any other asset. Convert BTC to XMR or other coins if you want.

Biden is good for Bitcoin

While the scenes of chaos and violence dominated the headlines, the markets had a very different take. US traders, especially those who have benefitted from the boom in tech stocks powered by Facebook, Apple, Amazon, Netflix and Google were hoping that the Republicans held onto the Georgia Senate seats.