Here's what might happen to Bitcoin's (BTC) price if the USA makes it a legal form of payment.
The United States is set to have a new President, with elections scheduled for November this year. Voters will choose between candidates like Kamala Harris (Democrat), Donald Trump (Republican), Robert Kennedy (Independent), and others.
The election campaigns are focusing on key issues such as financial stability, immigration, and abortion rights. Interestingly, both Trump and Kennedy have mentioned cryptocurrency in their platforms. They appear to be favored by pro-crypto voters, with promises to support and promote Bitcoin. Kennedy has even mentioned signing an executive order to mandate the government to purchase BTC, while Trump has vowed to ensure that the U.S. retains its BTC holdings.
If the U.S. were to make Bitcoin legal tender, ChatGPT predicts that this would substantially boost BTC's legitimacy and recognition. This move could attract massive investment from both retail and institutional investors, driving up the price. It would also provide a clearer regulatory framework for Bitcoin.
Such an announcement could lead to a wave of speculative buying and fear of missing out (FOMO) among investors, which would further push BTC's price upwards. However, it could also result in immediate volatility, with sharp price movements in both directions as traders react to the news.
For context, El Salvador became the first country to make BTC legal tender in September 2021, which coincided with a bull run in the cryptocurrency market. Since then, El Salvador has seen positive outcomes, like a significant boost in tourism. The number of tourists increased from 1.2 million in 2021 to 3.4 million in 2023, with more visitors coming from the United States. Improvements in safety measures by President Nayib Bukele, who supports BTC, have also contributed to this trend.
On the other hand, the Central African Republic (CAR) also made BTC legal tender but has faced challenges due to limited access to electricity, the Internet, and mobile coverage, making it difficult to implement and use a digital currency effectively.
