Trump: The Bitcoin Advocate
Former President Donald Trump’s potential return to the White House could trigger a significant surge in Bitcoin’s value, analysts told the Financial Times on July 5. The idea of a “Trump trade” is gaining traction among crypto traders due to his perceived pro-crypto stance and policies.
Bitcoin’s recent performance has struggled due to sales from miners and regulatory moves by US and German authorities. The anticipated repayments from the Mt. Gox bankruptcy case have also contributed to market volatility, causing Bitcoin to fall below $54,000 for the first time in months. However, analysts remain optimistic that a Trump victory could lead to a significant rally for Bitcoin. They predict it could break another all-time high in August and reach $100,000 by Election Day.
As of press time, Bitcoin had rebounded slightly and was trading a little above $56,000, according to CryptoSlate data.
Uncertain Political Landscape
Industry leaders are hopeful that a Trump administration, with a strong Republican presence in Congress, will foster a more favorable regulatory environment for cryptocurrencies. Recently, Donald Trump has emerged as a notable supporter of the crypto industry. He hosted crypto mining executives at his Mar-a-Lago estate and began accepting campaign contributions in digital assets. The former President has made several positive statements regarding crypto in recent weeks. There are even rumors that he is considering adopting Bitcoin as the country’s reserve asset.
Market analysts suggest that Trump’s pro-crypto stance could significantly enhance Bitcoin’s appeal, potentially driving its price to unprecedented levels. Some market watchers predict that Bitcoin could reach $100,000 by Election Day if Trump wins. A potential Trump presidency also brings broader financial market considerations. Policies anticipated under Trump, like stricter immigration controls, increased tariffs, and tax cuts, are expected to swell the US deficit, driving inflation and raising Treasury yields.
Geoff Kendrick, Standard Chartered’s head of digital assets research, highlighted that Trump’s policies might lead to “fiscal dominance.” This scenario involves significant government deficits and debt, which could undermine the Fed’s ability to control inflation. Kendrick believes that such a situation could benefit Bitcoin’s price, given its correlation with key US Treasury markers. He added that a steeper curve and higher break-even rates than real yields would likely push Bitcoin prices higher. This positioning Bitcoin as a hedge against waning confidence in the US Treasury market.
Election Impact on Bitcoin
If it becomes clear by late July that President Joe Biden will run for re-election, the probability of a Trump victory will increase. This could drive Bitcoin to new heights. However, the “Trump trade” largely depends on Biden being Trump’s opponent in November. According to the RealClearPolitics Betting Average, Trump currently holds a 55% chance of winning, while Biden stands at 16.5%.
As long as Biden stays in the race, Bitcoin enthusiasts are likely to feel optimistic. On the other hand, if Biden withdraws and a new candidate steps in, Bitcoin’s momentum might falter. Betting markets, such as Polymarket, have seen substantial wagers on Biden withdrawing from the race. Over $11 million has been placed on this outcome.
The post Bitcoin traders eye Trump victory as potential market boost – FT appeared first on CryptoSlate.
