As a seasoned crypto investor with a knack for deciphering market trends and political undercurrents, I can confidently say that the recent surge of bitcoin to $65,000 is a testament to the intricate dance between economic policy and electoral politics.
Following several days of steady, moderate trading, Bitcoin‘s price surged ahead on Friday night and into Saturday morning, reaching an unprecedented high of $65,000 for the first time since early August.
It appears that some plausible explanations for this $5,000 daily increase might be linked to the U.S Federal Reserve and the forthcoming elections within the nation.
First, it Was the Fed
In recent years, particularly following the shift in the U.S. Federal Reserve’s economic strategies during the COVID-19 pandemic, it has become evident that Bitcoin’s connection with these policies is notable. This change in strategy, which resulted in a surge of inflation, triggered an unexpected rise in interest rates – something unprecedented.
Over a long period, high investment rates led to less funding being directed towards risky assets such as Bitcoin. This situation made many experts predict a price increase once the U.S. Federal Reserve shifted its approach. In simpler terms, it was believed that the Fed would adopt the same strategy as the European Central Bank, the Bank of England, and the Bank of Canada by reducing their primary interest rates.
Following some setbacks, Chair Jerome Powell ultimately declared on Friday that action was now necessary. In his address at the 2024 Jackson Hole Economic Symposium, he didn’t specify an exact date for the rate reduction, but it is generally anticipated to occur in September.
Then, it Was RFK
Beyond the Federal Reserve’s influence, Bitcoin’s value appears to be closely tied to the ongoing U.S. presidential election. This is largely due to the stance of the Democratic party, particularly President Joe Biden and his administration, which has been less than favorable towards the cryptocurrency industry, as seen through the SEC’s (unsuccessful) efforts in this area.
Contrarily, the Republican nominee, Donald Trump, has shifted his views on the industry and vowed positive developments for Bitcoin, miners, and related entities. In fact, he’s gone as far as stating that he would dismiss the chair of the Securities and Exchange Commission, Gary Gensler, on his very first day in office.
The decision by President Biden to step down from the 2024 election and be replaced by Vice President Kamala Harris has shifted the storyline for this year’s voting. Meanwhile, it seems there’s positive development not only for Trump but also for the crypto sector, which was additionally reported last night.
On this occasion, Robert F. Kennedy, who had been the most outspoken advocate of Bitcoin among all contenders, halted his individual campaign and pledged support for Trump. This move was seen as beneficial to Trump, which in turn, was viewed favorably by the crypto market.
In just 24 hours, the price jumped from $60,000 to $65,000, which could potentially be due to both suggested reasons. Keeping an eye on the upcoming elections, any changes in the Fed’s policy, and their influence on the crypto market should make for a fascinating watch.
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2024-08-25 14:59