How will the future of Bitcoin be affected

15 Temmuz 2024

How will the future of Bitcoin be affected by the potential return of Trump?

Today’s market analysis on behalf of Rania Gule Market Analyst at XS.com

Bitcoin continued its gains above $60,000 levels on Monday, following a shooting at a campaign rally for U.S. presidential candidate Donald Trump. The former president is a supporter of cryptocurrencies, and it is evident that Trump’s chances of winning the presidential race have increased after Saturday’s events. Bitcoin’s value rose to $62,600, its highest level in ten days and for the largest assets in terms of market capitalization.

As the U.S. presidential election approaches, the cryptocurrency community has shown positive responses to news and comments related to Trump on social media platforms. In my opinion, this is likely due to the former president’s supportive stance on cryptocurrencies.

I support forecasts indicating that the cryptocurrency market responds to this news with higher volatility and may achieve similar gains to those seen after the debate that favoured presidential candidate Trump in June. Therefore, I believe that U.S. political news is driving gains in cryptocurrencies because it is a “speculation-driven” area.

Despite individual investors dominating the cryptocurrency market and their feelings of “panic,” large hedge funds are currently seeing very high liquidity flows, meaning “they are buying Bitcoin forcefully.” This could support the continued rise in the price of Bitcoin to the target of $100,000 or $120,000 per Bitcoin in the medium to long term.

In my view, overall market sentiment is positive, especially as recent data indicate that inflation is slowing down. The market has priced in a 95% probability of interest rate cuts in September, supporting continued gains in Bitcoin and cryptocurrencies in the near term.

As Bitcoin once again reaches $60,000 amid global economic uncertainty and market volatility, investors are looking for safe assets. Amid concerns about Mt. Gox and Bitcoin sales by the German government and the possibility of interest rate hikes in the United States for a longer period.

From my point of view, Bitcoin started last week’s decline amid concerns about outflows from exchange-traded investment funds in the United States. However, market whales preferred buying, leading to increased optimism in the entire cryptocurrency market led by Bitcoin.

It is worth mentioning that a net of $737.5 million was added to 11 exchange-traded funds in the past eight days, boosting Bitcoin’s price to its highest level since it fell to its lowest level at $53,602 on July 5. If re-elected, Trump may seek less stringent regulatory policies towards cryptocurrencies, potentially improving regulatory conditions and encouraging more investments.

His policies towards international relations and foreign trade also have a significant impact on the market, as tensions or stability in international relations may lead to fluctuations in cryptocurrency markets.

I believe that if his economic policies succeed in boosting economic growth, this could increase interest in cryptocurrencies as a good investment option. These effects, from my perspective, depend on the actual policies he implements if re-elected, and on how financial markets respond to those policies and general economic developments.