As the US presidential election approaches, cryptocurrency traders and analysts are speculating that a victory by Donald Trump in November could significantly boost the price of bitcoin to new heights, according to a report by the Financial Times.
Despite expectations of a post-halving rallybtc has struggled to gain momentum since April, facing several factors such as sales of assets seized by US and German authorities and the $9 billion surplus in sales of bitcoin and bitcoin Cash (BCH) from the defunct Japanese exchange Mt Gox.
However, market participants are increasingly discussing the possibility of a “Trump shift” that could boost the price of bitcoin in the second half of the year.
Trump's victory as a possible catalyst for price rebound
Following the April Halving event, during which the daily supply of btc available to miners was cut in half, the price of bitcoin has declined by more than 20% in the past month alone.
Several factors have contributed to this mediocre performance, including: Selling pressure From authorities holding over $15 billion worth of btc over the past few weeks to hedge funds dampening btc’s underlying trading volatility, traders and analysts have been searching for the catalyst that will drive the next upward move in bitcoin prices.
According According to the Financial Times, market optimism about a possible Trump victory in the upcoming US elections is growing. Traders and analysts perceive Trump as a more pro-crypto candidate, given his positive engagement with the industry and acceptance of crypto contributions.
Industry executives hope a Trump administration, coupled with a strong Republican presence in Congress, will lead to clearer, more favorable outcomes. Cryptocurrency Regulations.
According to Julius Baer analyst Manuel Villegas, the expectation is that Trump's energy policy proposals could benefit cryptocurrency mining companies, potentially enabling alternative energy sources for bitcoin mining.
Conversely, concerns have been raised over Biden's previous tax proposals on cryptocurrency miners, such as a proposed 30% tax.
How new policies could influence the price of bitcoin
The report also said the potential implications of Trump's policies for financial markets have sparked interest. Trump's policies If this leads to larger US deficits, more tariffs on foreign goods and tax cuts, it could result in higher inflation and higher US Treasury yields.
This scenario, known as “fiscal dominance,” could impact the price of bitcoin, which has shown a correlation with crucial U.S. Treasury markers, according to Geoff Kendrick, an analyst at Standard Chartered. A steeper curve and higher breakeven rates could push btc’s price higher as it acts as a hedge against declining confidence in the U.S. Treasury bond market.
However, the likelihood of a “Trump flip” and its impact on btc momentum largely depends on which opponent Trump faces in the election. The RealClearPolitics betting average currently puts Trump's odds with 55% and Biden's with 16.5%.
If Biden remains in the race, btc bulls could feel motivated. However, if a new candidate emerges with a chance of beating Trump, the report notes that bitcoin price performance may remain subdued.
However, narratives and perceptions play a major role in driving the cryptocurrency market, and if enough people believe in a Trump victory, it could positively influence the price of bitcoin.
At the time of writing, btc has reclaimed the $56,560 level after a sharp drop to $53,500 in the early trading hours of Friday.
Featured image of DALL-E, chart from TradingView.com
