In a recent surge, Bitcoin (BTC) briefly traded above $69,000, tantalizingly close to its all-time high (ATH) of $73,737, which was recorded earlier this year in March. This price movement has sparked widespread speculation about Bitcoin’s potential trajectory as the US presidential election approaches.
The Bitcoin ‘Bullish Setup’ Echoing the 2020 Rally
Since March, Bitcoin has experienced a period of sideways price action, but it is now consistently striving to break past its previous ATH. The price briefly touched $69,000 before slipping slightly to $68,674. This movement is reminiscent of historical patterns, particularly around significant events like the upcoming presidential election.
During a recent interview with CNBC, Matthew Sigel, Head of Digital Assets Research at VanEck, shared his insights:
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“Our bet is that this is a very bullish setup for Bitcoin into the election. We saw the exact same pattern in 2020 where Bitcoin lagged with low volatility and then, once the winner was announced, we had a high volume rally as new buyers came into this market.”
Sigel further suggested that once the election results are confirmed, a downgrade of US sovereign debt by Moody’s could be the catalyst for a Bitcoin rally in the fourth quarter of 2024.
Additionally, crypto analyst Michael van de Poppe highlighted that despite Bitcoin’s somewhat subdued performance in October—a month traditionally strong for the cryptocurrency—the digital asset is well-positioned to reach a new ATH soon. He noted that despite recent Federal Reserve interest rate cuts, the rates are still sufficiently high to make risk-off assets like US Treasury bills (T-bills) attractive, thereby drawing liquidity away from riskier assets like Bitcoin.
Van de Poppe also pointed out the rising M2 money supply, which has a strong positive correlation with Bitcoin, suggesting that the digital asset might be on the verge of a significant rally:
“As long as the M2 supply increases, Bitcoin’s price is going to follow… so it’s just a matter of time until Bitcoin price is going to pick up momentum.”
Notably, van de Poppe speculated that a potential Donald Trump presidency could foster optimism within the crypto sector, potentially igniting a bull run for digital assets in the upcoming months.
Trump’s Edge in Prediction Markets
In the political arena, data from Polymarket, a decentralized prediction market platform, shows that Trump is currently favored to triumph over the Democratic candidate Kamala Harris. As of now, Trump’s chance of winning the upcoming election has surpassed 66%, while Harris’ odds stand at approximately 34%.
A recent survey suggests that the impact of the crypto voting bloc on election outcomes might be underestimated. The study found that nearly 16% of voters consider a candidate’s stance on cryptocurrencies as a factor influencing their voting decision. While Trump remains the preferred candidate for many in the crypto industry due to his pro-crypto stance, Harris has been actively engaging with some of his crypto-supporting base.
An analyst recently suggested that a Harris-led administration could potentially be more favorable for the digital asset industry compared to the current Biden administration. As of now, Bitcoin is trading at $68,674, marking a 1.2% increase over the past 24 hours.
Conclusion
Bitcoin’s brief surge above $69,000 is igniting speculation about its future trajectory, especially in the context of the upcoming US presidential election. With influential factors like the US sovereign debt situation and potential political shifts, the cryptocurrency market could experience significant movements in the coming months. As investors and analysts closely monitor these developments, the crypto landscape remains dynamic and full of opportunities.
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