Bitcoin Blasts Through $80k

Bitcoin Pumps On Trump Victory 

The presidential election’s outcome was the catalyst that Bitcoin has been waiting for.

Bitcoin has performed like a beach ball underwater in the last 6 months. However, early signs are that the shackles are off. Bitcoin has blasted through the previous all-time high and is pushing through $80k.

Trump’s recent u-turn on the future of bitcoin is a factor. However, it’s not just the benefit that a pro-crypto Trump will bring; it’s also the number of pro-crypto candidates (around 250) who were elected to the Senate.

Trumps Bitcoin Act

In the next 12 to 18 months, the crypto space could see a Bitcoin Act, a bipartisan crypto policy, progress with tokenisation, and a policy on Defi.

The Bitcoin policies outlined in the Trump campaign will form this cycle’s biggest upside narrative for bitcoin. Adding bitcoin to the U.S. National Reserve and buying bitcoin to add to the Reserve would be bullish for the price of bitcoin.

If that were to happen, every sovereign state would be at a strategic disadvantage and have to follow the lead set by the U.S. That would add a whole new level of demand and could drive the bitcoin price to $250k.

Caution

That said, there are reasons to remain cautious about the bitcoin price.

The crypto policies that Trump outlined in his campaign may have been proposed as a means to secure votes. He may not progress those same policies.

In addition, banks and institutions will wait to see the Trump administration’s crypto policy. The policies will likely become clearer and be enacted in 2025.

Bitcoin Price Performance In The Short-Term

Seasonally, bitcoin exhibits upward momentum in price in the 4th quarter of the year of the halving event, irrespective of who wins the election. That upward momentum can be linked, in part, to the central bank debt re-financing cycle and the liquidity injection they facilitate.

Traditional markets tend to forward price the impact of increased liquidity once it’s clear that the liquidity spigot has been opened. A correction often follows because the flows don’t arrive until the new year. That is likely to apply to the bitcoin price performance.

If you look at bitcoins price in previous election periods, the trajectory is up until the presidential inauguration. There then follows a period of chop into March.

March to April is tax season, and bitcoin experiences selling pressure and a pullback during that period. That pullback is also observed in traditional equity markets.

Global Liquidity Is Key

If global liquidity remains strong at that point, then bitcoins price should rally strongly into the end of the year.

While it’s difficult to be too predictive, the probability of a continued rally in bitcoins price into the end of this year remains strong.

Risk on sentiment is definitely back in play. That said, the FED trumps all. If they remove liquidity, it’s game over for many financial assets, including bitcoin. The FED’s decisions and their impact on market liquidity are crucial factors to consider when predicting bitcoin’s future price movements.

Click on the Journal link below to read more about the factors currently driving the economy, the stock market and Bitcoin.

Link: JOURNAL