As the US presidential election draws near, there is a growing belief among crypto traders and analysts that a win for Donald Trump in November could lead to a significant surge in the Bitcoin price, as reported by the Financial Times.<\/p>\n
Despite expectations of a post-Halving rally, Bitcoin has faced challenges in gaining momentum since April, including factors such as asset sales by US and German authorities and the looming $9 billion worth of Bitcoin and Bitcoin Cash (BCH) sales from the now-collapsed Japanese exchange Mt Gox.<\/p>\n
Amidst these hurdles, discussions are taking place within the market about a potential “Trump trade” that might propel Bitcoin’s price upwards in the second half of the year.<\/p>\n
Following the Halving event in April, which saw the daily supply of Bitcoin to miners cut in half, the price of Bitcoin has dropped by over 20% in the past month alone.<\/p>\n
Various factors have contributed to this downward trend, such as selling pressure from authorities holding over $15 billion in BTC, and hedge funds dampening volatility through BTC basis trade. Market participants have been on the lookout for a catalyst to drive the next bullish movement in Bitcoin prices.<\/p>\n
The Financial Times states that there is growing market optimism surrounding a potential Trump victory in the upcoming US elections. Traders and analysts view Trump as a more crypto-friendly candidate due to his positive interactions with the industry and acceptance of crypto contributions.<\/p>\n
Industry insiders are hopeful that a Trump administration, coupled with strong Republican representation in Congress, could lead to more favorable and transparent crypto regulations.<\/p>\n
Analysts like Manuel Villegas from Julius Baer anticipate that Trump’s energy policy proposals could benefit crypto mining companies by possibly facilitating the use of alternative energy sources for Bitcoin mining.<\/p>\n
On the contrary, concerns have been raised about Biden’s previous tax proposals targeting crypto miners, including a proposed 30% tax.<\/p>\n
The potential consequences of Trump’s policies on financial markets have also attracted attention. If Trump’s policies result in a higher US deficit, increased tariffs on foreign goods, and tax cuts, it could lead to higher inflation and US Treasury yields.<\/p>\n
This scenario, known as “fiscal dominance,” could influence the price of Bitcoin, which has shown a correlation with key US Treasury benchmarks. A steeper curve and higher break-even rates could drive Bitcoin’s price up as it serves as a hedge against diminishing confidence in the US Treasury market.<\/p>\n
However, the likelihood of a “Trump trade” and its impact on Bitcoin’s momentum hinges largely on Trump’s election opponent. Presently, RealClearPolitics Betting Average puts Trump’s odds at 55% and Biden’s at 16.5%.<\/p>\n
If Biden remains a contender, Bitcoin bulls could be encouraged. Yet, if a viable new candidate emerges to challenge Trump, the report suggests that Bitcoin price performance might remain subdued.<\/p>\n
Nevertheless, perceptions and narratives are vital in influencing the crypto market, and a collective belief in a Trump victory could have a positive effect on the Bitcoin price.<\/p>\n
<\/p>\n
At the time of this reporting, Bitcoin has recovered to the $56,560 level following a sharp decline to $53,500 during early Friday trading hours.<\/p>\n
Featured image from DALL-E, Chart from TradingView.com<\/p>\n","protected":false},"excerpt":{"rendered":"
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