Bitcoin Bounces Back Above $63,000: Could Crypto Become the New 'Trump Trade'?
Bitcoin recently regained its momentum and rebounded above $63,000 on Monday after hitting a low of $60,000 at the end of June. Despite facing various challenges such as a complex and ever-changing macro environment, sell-off shocks, and a slowdown in ETF demand, the cryptocurrency market is now experiencing new optimism with the increasing possibility of Republican presidential candidate Trump winning the 2024 presidential election, who is supportive of the cryptocurrency industry.
Most of the stocks related to the concept of digital currency witnessed significant gains on Monday. $TeraWulf(WULF.US$ emerged as the leader with an impressive surge of more than 17%, which took its total gains for the year to over 117%. Additionally, other stocks such as $Cipher Mining(CIFR.US$, $Marathon Digital(MARA.US$, $CleanSpark(CLSK.US$, and $BIT Mining(BTCM.US$ also experienced increases of over 10%.
With Biden's poor performance in last week's first debate and the Supreme Court's ruling in favor of Trump on this Monday, the mood for Trump's victory is higher and higher. According to analysts, Republicans believe that taking a favorable stance on the encryption industry will help them win voters and receive campaign funding from super PACs that support pro-crypto politicians. At the same time, the Republican Party's advantageous position in this year's elections and the continuous signals of support for cryptocurrency have in turn benefited the crypto industry.
Trump has been showing increasing support for cryptocurrency in the lead-up to the November election. In early June, he met with a group of 12 bitcoin mining executives and experts at the Mar-a-Lago Club. During the meeting, he not only pledged to become an advocate for the cryptocurrency mining industry upon his return to the White House, but also made a promise that all future bitcoins will be minted in the United States. Trump believes that promoting the manufacturing and trading of bitcoin in the US will not only bolster the country's position in the global cryptocurrency market, but also stimulate the development of related industries and inject new momentum into the US economy.
Recently, according to two sources familiar with the matter cited by Axios, Donald Trump is planning to attend the annual Bitcoin (BTC) conference in late July 2024 and negotiate the possibility of delivering a speech at the event.
Gautam Chhugani and Mahika Sapra, analysts from Bernstein pointed out that a win by Trump in this year's election could lead to a crypto rally driven by institutional adoption and a more favorable regulatory landscape: “If the election sentiment shifts more Republican, crypto would end up as the primary 'Trump trade' and hopes of a favorable regulatory regime would change the 'use-case' narrative around blockchains.”
Standard Chartered's Head of Digital Assets Research, Geoff Kendrick expected that bitcoin may hit the $100,000 mark as the U.S. presidential election approaches in November. Furthermore, if Trump is re-elected, the price could increase to $150,000 by the end of 2024.
Renowned trader Rekt Capital has also made a bullish prediction:
"The June downtrend is over, the July uptrend begins."
On the positive side, with more institutional investors entering the Bitcoin market, market liquidity and depth have increased, and market recognition of Bitcoin's investment value is also improving. At the same time, the expectation of favorable regulatory policies, including the support of the Republican party and the progress of Ethereum spot ETF, is changing the sentiment of the cryptocurrency market. Currently, the correlation between Bitcoin and Ethereum remains above 0.8, and investors are hoping that the Ethereum spot ETF, which will officially launch in early July, can bring some upward momentum to Bitcoin.
However, from a cautious perspective, there are still some danger signals that cannot be ignored:
● Potential supply shock: Among the known largest Bitcoin holders, the German government continued to transfer seized Bitcoin worth about $150 million to cryptocurrency exchanges last week, and the US government is also continuing to transfer more Ether. The recent transactions have been widely interpreted as signals that these two governments intend to sell their crypto assets. Miners are also selling Bitcoin on a large scale to raise funds to support their business expansion and operations. In addition, the Mt. Gox Bitcoin exchange in Japan will distribute a large amount of Bitcoin in July as part of the bankruptcy proceedings, further increasing the selling pressure in the market.
● Complex macro environment: With increasing uncertainty in the macro environment and the expectation of rising long-term interest rates gradually spreading to the cryptocurrency market, the outlook for risk appetite is even more grim. Austin Reid, Global Head of Revenue and Business at FalconX, said that the cryptocurrency market reflects some short-term uncertainty that has also appeared in other asset classes. "A lot of people in the market have questions that are mostly anchored on concerns from a macro perspective."
● Bitcoin ETF frenzy cools down: The market frenzy driven by the approval of the Bitcoin spot ETF has cooled down. CoinShares data shows that the inflow of Bitcoin digital assets in the second quarter decreased by 80% to $2.6 billion, compared to $12.8 billion in the first quarter. The demand for Bitcoin ETF is slowing down. From a higher frequency perspective, as of the week ending June 29, the total outflow of funds from digital asset funds was $30 million, marking the third consecutive week of outflows. It is worth noting that the outflow rate has slowed down, indicating a possible change in sentiment.
Source: Bloomberg, Medium, Investing, CNBC, Mitrade
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Badai94 : $Toll Brothers (TOL.US)$ $Stella-Jones Inc (SJ.CA)$ $Toll Brothers (TOL.US)$
104257152 : i believe
Methods : News a day old
RaselislamOpp : nice
EZ_money : sell it before you lose more profits
Tonyco : It is a "Trump trade" but not because he supports it. It's because a Trump win will crash the markets and US will enter a very dark age. BTC is a much safer investment on account of it's decentralized nature and inability to be manipulated by governments.
104327919 : good
Eve Forever Gain : Trading will only bring in volume,
Only what is useful to people will become more and more attractive and valuable.
The volume is just the icing on the eve of all the bubbles.
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