Trump and Bitcoin: An Alliance That Promises New Records for Cryptocurrency

The "red wave in the United States", where Donald Trump won the presidency and the Republicans obtained total control of Congress, fueled the growth of the price of Bitcoin, which yesterday hit $80,000 for the first time in history, but industry experts see new highs on the horizon.

In addition to Republican Trump's promises to support and regulate the crypto industry, interest rate cuts by the Federal Reserve support the bullish scenario for Bitcoin, according to analysts, while massive inflows of money into spot Bitcoin ETFs show that more and more investors, including institutional , is turning its attention to the crypto space.

• Nansen: "Bitcoin reaching a new all-time high volume is a clear signal of the positive momentum given by the election"

Bitcoin shows no signs of "overheating" despite hitting new all-time highs last week, according to several analysts consulted by Cointelegraph, who pointed to fundamentals that suggest the world's most heralded cryptocurrency may continue its rise. Cointelegraph.

"Bitcoin hitting a new all-time high on high volume is a clear signal of the continued positive momentum from the election," said Aurelie Barthere, an analyst at blockchain analytics platform Nansen, adding that following Trump's victory, traders have returned to "risk-on" mode (n.r. which means they are optimistic and take on higher risk investments).

Alex Thorn, head of research at digital asset and blockchain firm Galaxy, pointed out that while the level of the Open Interest indicator - a measure that quantifies unsettled Bitcoin derivative contracts - has "been slightly pushed to new annual highs, funding rates remain largely unchanged". A high level of Open Interest usually causes concerns in the market about a possible increase in Bitcoin volatility, but the positive funding rate shows that traders are bullish on the price of the cryptocurrency and buyers are willing to pay sellers a fee to hold their positions.

The Galaxy analyst expects Bitcoin and other cryptocurrencies to trade "at levels well above all-time highs (n.a. last week) over the next 12-18 months," writes Cointelegraph.

According to another article of the publication dedicated to the crypto area, the massive inflows of money into Bitcoin ETFs, which reached new records, the price breaking out of the slightly downward trend of the past seven months and the "red wave from the United States" are elements that caused institutional investors to increase their allocations to Bitcoin.

Also, the chances that the United States will create a Strategic Bitcoin Reserve and estimates that the Federal Reserve will continue to cut interest rates are causing market participants to increase their investments in stocks and crypto.

• Bernstein Research: "There is enough room for Bitcoin to grow"

Joel Kruger, market strategist at financial technology company LMAX, says there is "a lot of support around crypto assets in 2024, including the promise of a friendly administration in the United States," writes Investors Daily Business.

After a solid start to the year, Kruger predicts a "stellar" performance in the latter part of 2024, with the $100,000 level being the next major threshold for the cryptocurrency, which he believes can be reached before the end of the year.

Bernstein Research analysts estimate that Bitcoin may even reach $200,000 in 2025. "The lack of fiscal discipline in the US, record levels of debt and monetary expansion have led to increased demand for so-called "hard assets" that they have some intrinsic value)," the analysts wrote in a note, according to Investors Daily Business. "The success of spot Bitcoin ETFs has further accelerated the trend, with plenty of room for growth." According to Bernstein Research, Bitcoin may reach $90,000 by Inauguration Day, January 20 next year, which marks the beginning of the president-elect's term, according to the source.

• Bitcoin has breached the $75,000 mark, which represents a positive technical break-out, according to Ned Davis Research

Bitcoin is on track to grow by 60% by April 2025, according to Ned Davis Research, which has upgraded its recommendation for the cryptocurrency to "a trade-only long" with a price target of $121,000, writes Business Insider.

"We like the setup for Bitcoin. "The price is rising on the optimism brought by Trump's victory and we see it moving forward without much resistance, at least until Trump takes office," said Pat Tschosik, strategist at Ned Davis Research.

According to the analyst, the "bullish" configuration of Bitcoin is based on the consolidation in which the cryptocurrency has been in recent months, formed after the cryptocurrency had reached a maximum in March, slightly below the level of 74,000 dollars. With Trump's victory, Bitcoin crossed the $75,000 mark, which represents a positive technical break-out as long as the previous resistance (a.k.a. the price level that acts as a barrier to the price increase) of $73,000 will work as a new support (n.r. price level that acts as a barrier to the drop in the quotation), where buyers accumulate.

"If Bitcoin breaks below the support (former resistance) near the $73,000 level, we will likely re-evaluate (n.r. estimate) down," Tschosik said.

According to Business Insider, Ned Davis Research's price target represents the dollar upside of Bitcoin's last cyclical bull move of $48,000, added to the current break-out level of $73,000. However, the strategist emphasizes that he will not wait for Bitcoin to reach $121,000 to close the trade, but will have active management. "We will be relying heavily on our favorite short- and medium-term trend indicators to close this deal, rather than waiting for the price target to be reached," Tschosik said, as quoted by Business Insider.

• What did Trump promise the crypto industry before the election?

In his summer speech at the largest Bitcoin conference in the United States, held in Nashville, Donald Trump said that if he returned to the White House, he would make sure that the federal government never sold its Bitcoin holdings, writes CNBC.

"For too long our government has violated the cardinal rule that every Bitcoin supporter knows by heart: Never sell your Bitcoin holdings," Trump said.

The Republican has pledged to maintain the Bitcoin holdings the US has amassed from seizing the assets of financial criminals. "If elected, the policy of my administration will be for the United States of America to retain 100% of the amount of Bitcoin that the US government owns or will acquire," Trump said.

• The dismissal of the chairman of the SEC, who is perceived as an opponent of the crypto industry

The dismissal of the chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, perceived as an opponent of the crypto industry, was another thing mentioned by Trump in recent months, the American publication also writes.

However, the US president does not have the power to fire the SEC chairman, and even if Trump were to appoint another chairman, Gensler would remain commissioner of the agency, which is independent, according to CNBC.

During his tenure at the helm of the SEC, Gensler has initiated more than 100 lawsuits against crypto firms, arguing that in his view, much of the industry is already under its jurisdiction, and the lawsuits are only bringing the sector into compliance with the rules under which the entities that are officially under the supervision of the SEC operate. On the other hand, crypto firms argue that recent legal battles have not provided the regulatory clarity the industry is looking for, and the Commission has grossly exceeded its mandate.

Under these conditions, Trump promised to create a presidential advisory council for Bitcoin and crypto. "The rules will be written by people who love the industry, not by people who hate it," he said.

• Support United States Bitcoin Miners

After a summer meeting with representatives of the biggest names in the Bitcoin mining sector in the United States, such as Riot Platforms, Marathon Digital Holdings or Core Scientific, Trump began to praise the industry, writes CNBC. "Biden's hatred of Bitcoin only helps China, Russia and the Radical Communist Left. We want all remaining Bitcoin to be MADE IN THE USA!!! That will help us be the DOMINANT ENERGY," the Republican wrote on a social network.

Since then the idea has been brought up several times by Trump. "If crypto is going to define the future, I want it to be mined and produced in the US," he said at the Nashville conference.

• Interest rate cuts

Trump has said that if elected president he will lower interest rates, which are not within his mandate, as they are set by the Federal Reserve, which operates independently of the White House, according to CNBC.

Historically, rate cuts and monetary easing by the Fed, measures that lower the cost of borrowing but also reduce the yield of fixed income instruments, have coincided with a rise in crypto prices. The Federal Reserve cut interest rates by 50 basis points in September for the first time in four years, and last week it cut another 25 basis points.

In Trump's view, the US president should have the right to influence interest rate decisions, as he stated in an October interview, according to CNBC.