- Bitcoin recent surge is influenced by the prospect of a Trump presidency and renewed Chinese liquidity.
- Many investors believe Trump’s policies would positively impact both the crypto and financial markets.
- Bitcoin ETFs saw inflows due to rising prices and “fear of missing out” among institutional investors.
- The U.S. presidential election outcome is expected to significantly impact Bitcoin and the crypto market’s future trajectory.
Bitcoin in the last 24 hours surged to $70,000, its highest point since July. But this momentum quickly paired back, raising questions about the real drivers behind the price spike. According to Kavita Gupta of Detal Blockchain, there are several factors that play a role in this latest surge, with one major influence being the prospect of a Donald Trump presidency.
Gupta noted that “early poll results have a lot of people, especially the crypto community, banking on President Trump’s win,” which has sparked optimism in the market. Also, renewed liquidity from China is boosting Bitcoin’s price, continuing a historical trend of Chinese investments pushing Bitcoin upwards before affecting other cryptocurrencies.
Bitcoin: Presidential Impact and Investor Sentiment
Gupta noted the growing sentiment that a Trump win would benefit not just the crypto industry. But the financial markets too. This sentiment is powerful outside of the United States, where many believe that “President Trump would be a much better candidate for not just crypto policies but overall for the markets”. Investors are already reacting, with signs of “bull cycles being very close,” Gupta said.
Despite this confidence, there is still a sense of caution among the investors. Trump’s backing of the crypto platform, World Liberty Financial, has raised $13 million through a token sale. But Gupta pointed out that this figure fell short of expectations. “It is nowhere close to the target they set,” she remarked.
Bitcoin ETFs and Market Dynamics
In addition to the Trump factor, Bitcoin ETFs have played a role in the recent price surge. Spot Bitcoin ETFs saw inflows of nearly $2.7 billion over the last seven trading days, which Gupta attributed to a mix of rising Bitcoin prices and a “fear of missing out” among institutional investors. She described how, in Dubai, she witnessed investors rushing to liquid positions. Particularly in blue-chip tokens, as they anticipated further price increases. “Markets are going to go up,” she stated, noting the heightened activity in these markets.
However, Gupta notes that the market’s focus on Bitcoin ETFs might be slightly overblown. While the inflows have been significant, she sees them more as a reflection of the broader optimism that surrounds Bitcoin rather than a primary driver of its price movements. Instead, she believes that the anticipation of a bullish cycle, combined with political factors, is what primarily fuels the current market dynamics.
The Influence of China
Gupta also pointed out that the renewed liquidity from China is playing a pivotal role in Bitcoin’s upward trajectory. “When it is China, it is always Bitcoin that goes up,” she explained. This Chinese liquidity has historically had a major impact on Bitcoin, and this time is no different.
According to Gupta, the Chinese market often leads the previous Bitcoin rally, followed by movements in altcoins and Ethereum. She believes the market is in the early stages of this pattern, with altcoins expected to follow Bitcoin’s lead soon.
Vice President Harris and the Crypto Market
While much of the crypto community is betting on Trump, Gupta also acknowledged growing interest in Vice President Kamala Harris. Notably, Harris received a $12 million donation in XRP from crypto investor Chris Larsen. Gupta mentioned that some conversations behind the scenes suggest that Harris could adopt a more progressive stance toward digital assets. But it remains uncertain. She noted that Harris, “does not have any clarity about what her policies would look like.”
This uncertainty contrasts sharply with Trump’s vocal support for cryptocurrencies. Gupta believes that Harris will need to make clearer policy announcements, especially on issues like taxes on unrealized gains, to win over the crypto community. Many traders fear that such taxes could hurt the market and they watch closely for any signs of policy shifts in this area.
Altcoins and Other Trends
Apart from Bitcoin, Gupta is also tracking developments in the altcoin market. Every time Bitcoin’s price rises, she says, altcoins tend to follow. “One of the first things I look at is the Asian markets,” she noted, referencing how liquidity shifts in those regions often signal trends in altcoin prices. She’s particularly interested in tokens like Solana, Dogecoin, Aptos, and others, which she sees as indicators of broader market trends. She also added that Ethereum usually lags behind these altcoins but often signifies a more sustained market rally when it begins to rise.
Another trend Gupta mentioned is the increasing activity in meme coins, which she compares to the NFT boom in previous market cycles. These tokens often experience rapid surges in liquidity, further amplifying market volatility. Gupta is keeping a close eye on these trends, as they could signal the direction of the broader market in the months to come.
Conclusion
Gupta believes that the outcome of the U.S. presidential election will determine the direction of the crypto market. She predicts that if Trump wins, a “very big huge boost in the market,” which could continue until early 2025. However, she also cautions that the market may correct itself in January or February, depending on how political events unfold.
If Harris or another Democratic candidate wins, Gupta expects a slower, more cautious approach from the market. She believes that it would take policy changes such as cuts to federal interest rates and clarifications on tax policies to stimulate a similar market rally. In either scenario, Gupta sees the political landscape as a major driver of crypto prices heading into 2025.
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