Bitcoin at a crossroads. How to plan your next investment move?
Recently two events are affecting the trend of cryptocurrencies: interest rate cuts and the US election.
Judging from the trading volume, the volume has been relatively sluggish recently, and the bitcoin price has begun to fluctuate.
Obviously, investors in the coin industry hold different attitudes toward the two events.
How will interest rate cuts combined with the US election affect Bitcoin? Is it currently a good time to invest or to exit? Today I'd like to share some personal thoughts. If you have any different opinions, please kindly discuss them in the comments section.
I will illustrate my thoughts from three aspects. The first two parts are about the impact of the two events on Bitcoin. In the last part, I will predict Bitcoin's future trend and explain how we should adjust our investment strategy accordingly.
1. With the arrival of interest rate cuts, can Bitcoin return to the bull market?
Personally, I believe that an interest rate cut will likely lead to a rise in Bitcoin, offering a chance for profit. However, whether it will bring back a bull market remains to be seen.
Judging from Bitcoin's investment logic. As an investment without physical assets, Bitcoin's price depends on its visibility, the number of traders, and the frequency of transactions. When more people trade it and demand increases, the price naturally rises. Interest rate cuts are beneficial for capital inflow into higher-return assets like stocks, funds, and cryptocurrencies. Lower interest rates can shift public attention from bonds to high-risk markets, which is undoubtedly favorable for Bitcoin.
Judging from historical data. Interest rates on Bitcoin and US stocks are negatively correlated. Interest rates fall, and Bitcoin is more likely to rise.
The last interest rate cut cycle in the US occurred around 2020. It can be seen that when the Federal Reserve cut interest rates, the Bitcoin price actually ushered in a wave of insane length.
From an emotional point of view, interest rate cuts are expected to directly promote increased market liquidity, trigger market optimism, and drive the cryptocurrency market to usher in a wave of upward trends in the short term.
However, the Bitcoin market is complex, and it is not solely affected by interest rates. The policy has a significant impact on cryptocurrency, including mainstream recognition of the value of BTC, inclusion in exchanges, and the release of Bitcoin ETFs.
To sum up, interest rates can drive Bitcoin to rise in a wave, but whether it can enter a bull market also depends on public reactions and expectations.
2. In the US election, which candidate would be more favorable for Bitcoin?
At the moment, it seems to be Trump. However, to predict Bitcoin prices, it's crucial to closely follow Harris's stance and actions.
Trump strongly supports Bitcoin and actively participates in the Bitcoin conference, and Trump Mall also supports Bitcoin payments. He even declared and promised that if elected, the government would retain 100% of its Bitcoin holdings to keep the U.S. leading in the cryptocurrency field.
Harris' attitude is much more ambiguous. So far, she hasn't publicly committed to supporting cryptocurrencies and might continue Biden's strict regulation approach. Although Harris's team is engaging with cryptocurrency companies, this move is likely aimed at securing votes. If Harris's chances of winning improve, she may not need the support of funds and voters from the crypto sector.
The current Bitcoin price trend is largely dependent on Harris's attitude. In the 8.8 “Harris Cryptocurrency” campaign, Bitcoin rose more than 10% on the same day, but Harris did not participate in the crypto round table that day and the probability of Harris being elected overtook it. Bitcoin fell again and entered into turmoil.
Therefore, we need to continue to follow up on the election progress and Harris' attitude towards Bitcoin.
3. Current Bitcoin Strategy
As mentioned above, both interest rate cuts and the election will affect Bitcoin's price. The interest rate cut is good news for Bitcoin and is almost certain to happen. The current uncertainty comes to election. I think there will be the following three situations：
1. Interest rate cut+Trump election = Bitcoin soars
2. Interest rate cut+Harris's change in attitude towards Bitcoin = Davis double hit. Bitcoin may soar directly.
3. Cut interest rates first+ Harris still has an attitude towards Bitcoins+ Harris elected = Briefly rising first and then falling back down. Bitcoin may enter a period of winter
Scenario 1 is an event with a high probability; Case 2 is less likely, but the Bitcoin price will reach next level; Case 3 is the most dangerous, but there is also a short profit opportunity.
After evaluating the profit probability, I decided to purchase some crypto first, including BTC/SGD, BCH/SGD, , DOT/SGD, etc.
Currently, licensed trading platforms support going long, so choose fixed investment to buy. The current price of Bitcoin is around $58k. Purchase some first and then evaluate the election status and price trend every month before deciding whether to increase the position.
PS: Bitcoin has concept stocks and ETFs like $LIST20010, LIST20074, LIST21030, and LIST22873. Stocks and ETFs can be shorted. Therefore, volatility can also be used to invest. However, I'm not used to short selling, so I won't introduce it here.
Firstly, divide your holding into 3 parts. Leave 1 of them until September-October. If interest rate cut drive bitcoin price to $66k, sell it out.
Keep 1/3 until October to November. Observing the progress of US election and Harris's attitude towards Bitcoin.If Harris is more likely to win and her stance on Bitcoin doesn't improve, then sell. If Harris changes her stance on cryptocurrencies, then sell Bitcoin when it reaches around $70k.
Keep 1/3 until January 12-25. At this point, the election results are almost decided. If the situation looks unfavorable, exit quickly. If the situation is stable, continue to hold and wait for the policy announcement to see Bitcoin rise.
The above is my rough investment strategy. It may not yield a big profit, but it guarantees that the principal amount will not be encroached upon.
If mooer to know anything about cryptocurrencies, welcome to leave a message in the comments section! Comments and suggestions are also welcome! ![]()
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Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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