2024-10-25 17:31 |
Traditionally, a Republican victory has been seen as more favorable for Bitcoin, but many now believe that the cryptocurrency is primed to break records regardless of whether Donald Trump or Kamala Harris takes office.
Crypto’s Future Tied to Leadership ChoicesNo matter who wins the upcoming election, the overall outlook for the crypto market remains optimistic. However, the direction for Bitcoin and altcoins could vary depending on the leadership. Matthew Sigel, head of Digital Assets Research at VanEck, foresees Bitcoin benefiting from potential U.S. debt downgrades and tighter fiscal policies. He notes that Bitcoin’s appeal as a hedge against financial instability could rise, while altcoins might experience a more complex path, with Trump’s policies potentially favoring alt coins.
James Butterfill, Head of Research at CoinShares, argues that a Trump presidency could weaken the U.S. dollar due to protectionist trade policies and inflationary moves. This would likely boost Bitcoin as a safeguard against a devaluing dollar. Additionally, Trump’s pro-crypto stance, along with his vice-presidential pick J.D. Vance, could create a more welcoming regulatory environment for digital currencies.
On the other hand, Butterfill suggests that a Harris presidency could bring a more cautious approach to crypto regulation, contrasting with Biden’s stricter stance. However, Harris’s relatively vague position on cryptocurrency leaves room for uncertainty. This ambiguity could benefit Bitcoin, while altcoins may face increased regulatory scrutiny, potentially tightening the market for non-Bitcoin digital assets.
According to data from Deribit, there is volatility ahead. On Friday at 08:00 UTC, Deribit will see the expiration of BTC and ETH options contracts valued at $4.2 billion and $1 billion, respectively. Options give holders the right, but not the obligation, to buy or sell an asset at a specified price within a certain timeframe.
Source: Derabit
Fresh highs Ahead?However, longer-term crypto options traders have set their sights on Bitcoin hitting fresh highs in the coming weeks. Options contracts expiring on November 8 are heavily concentrated at the $75,000 strike price, signaling a key point of interest for market participants. Similarly, open interest for options expiring on November 29 shows significant bets placed at the $80,000 strike level, reflecting growing optimism among traders.
Despite a narrative that Trump’s pro-crypto stance would drive Bitcoin higher, traders now see macroeconomic factors, such as potential Federal Reserve rate cuts, as more influential.
Mick Mulvaney, former acting White House Chief of Staff under Donald Trump, described the cryptocurrency industry as one that “breaks the mold” of U.S. politics by appealing to both Democrats and Republicans. In an Oct. 23 interview with NewsNation, where he serves as a contributor, Mulvaney emphasized that crypto doesn’t conform to traditional political divisions, crossing party lines in ways few industries do.
“Crypto doesn’t fit neatly into the old Republican-Democrat silos,” Mulvaney said, highlighting the bipartisan interest in the growing sector. He implied that lawmakers are gradually “realigning” their perspectives to adapt to emerging industries like cryptocurrency.
Reflecting on the evolution of the industry, Mulvaney noted its gradual maturation. “It’s a new industry, and it’s starting to mature a little bit — though not much,” he said. Recalling his own experiences from four years ago, Mulvaney remarked on how crypto advocacy in Washington has transformed from individuals sending angry emails from their basements to well-organized, professional operations engaging with lawmakers on Capitol Hill.
The timing of the election coincides with broader financial developments, notably the first Fed rate cuts in four years and a surge in stock prices. These factors contribute to a perfect storm for Bitcoin to reach new highs, according to Mei. “The fact that this coincides with the Fed rate cuts and a stock market rally only strengthens the argument that Bitcoin could surpass its previous all-time high and climb to $80,000,” Mei added.
Bitcoin Could Surge to $200,000 by 2025 Says BernsteinBitcoin could reach a staggering $200,000 by the end of 2025 as it moves into what analysts are calling “a new institutional era,” according to a comprehensive report from Bernstein Research released on Oct. 22. The 160-page report, referred to as the “Black Book,” outlines a bullish case for Bitcoin, citing the continued consolidation of the mining industry and increased institutional involvement.
Source: X
In a post on X Matthew Sigel, VanEck’s head of digital asset research, highlighted Bernstein’s key points, noting that institutional investors are increasingly dominating the Bitcoin landscape. “Ten global asset managers now hold around $60 billion in Bitcoin wrapped as regulated exchange-traded funds (ETFs), compared to just $12 billion in September 2022,” the report notes. This shift underscores the growing influence of traditional financial institutions in the crypto space, with Bernstein predicting that “by the end of 2024, Wall Street will likely replace Satoshi as the top Bitcoin wallet.”
Paul Tudor Jones Bets On BitcoinProminent financial analysts, including those at Bernstein, JP Morgan, and hedge fund veteran Paul Tudor Jones, are becoming more bullish on Bitcoin, especially as the U.S. presidential election looms in November. Rising geopolitical tensions and fears of economic instability are prompting investors to seek refuge in safe-haven assets like Bitcoin and gold, a trend referred to as the “debasement trade.”
In a report released on Oct. 3, JPMorgan noted that this debasement trade is being driven by factors such as ongoing geopolitical uncertainty, concerns over long-term inflation, and high government deficits across major economies. These elements have led investors to flock to assets that are perceived as stores of value, like gold and Bitcoin. “Rising geopolitical tensions and the upcoming U.S. election are likely to reinforce this trend, favoring both gold and Bitcoin,” JPMorgan stated in the report.
Paul Tudor Jones echoed these sentiments on Oct. 22 during an appearance on CNBC’s Squawk Box, where he outlined his investment strategy in light of the economic outlook. Jones, the founder of Tudor Investment Corporation, expressed his preference for assets that can weather inflationary pressures. “All roads lead to inflation,” Jones said, explaining his current portfolio mix. “I probably have some basket of gold, Bitcoin, commodities, and Nasdaq technology stocks, and I would own zero fixed income.”
As Bitcoin continues to solidify its role in the global financial system, it is clear that institutional involvement will play a key role in its future trajectory. Whether it’s the ongoing ETF boom or the broader adoption of BTC by traditional finance, many believe that Bitcoin’s next bull run could see it reach unprecedented heights—possibly as high as $200,000—by 2025.
The Options Market Is BullishThe options market is already reflecting this bullish outlook. With volatility on the rise as election day approaches, traders are increasingly betting on Bitcoin’s upward trajectory. Options with expiration dates in late November and December show heavy interest at the $80,000 and $100,000 strike prices, signaling optimism that Bitcoin’s current momentum will continue into the new year.
However, Bitcoin has faced short-term setbacks. In the past 24 hours, BTC slipped below $67,000, sparking a broad decline across major cryptocurrencies. As of the late European morning, Bitcoin was trading around $66,580, down 1.46%.
Source: Brave New Coin Bitcoin Liquid Index
While the market has cooled in recent days, traders remain confident that Bitcoin will soon break out of its current range. As always, patience is a virtue.
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