Bitcoin Set to Soar as Trump’s Inauguration Sparks Major Market Moves!

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What to know:

  • The assuaging of inflation concerns clears the way for bitcoin to set record highs as Trump’s swearing-in nears, 21Shares said.
  • Asymmetric price discovery likely on potential hints of creation of a strategic bitcoin reserve on day one, Two Prime noted.
  • Market maker Wincent expects 10% price swings in major coins, including BTC.

Enthusiasm among crypto traders is growing once more, with expectations that Bitcoin (BTC) could reach new peak values in the near future, especially as the inauguration of President-elect Donald Trump, who has a pro-crypto stance, approaches on January 20.

The primary cryptocurrency, Bitcoin, has experienced a surge of approximately 11% since it hit around $90,000 on Monday. Over the last day, it has climbed by almost 3%, reaching above $100,000 at one instance, according to CoinDesk’s data.

As a crypto investor, I noticed the surge into six figures in the market was triggered by a less severe-than-anticipated Core Consumer Price Index (CPI) report, which eased concerns about a hawkish Federal Reserve and its impact on prices. Now, the focus has shifted towards President Trump’s inauguration and the possibility of pro-crypto announcements during his first day in office, causing excitement among investors like myself.

As a crypto investor, I am confident that with the diminishing fear of inflation, Bitcoin could smash through the stubborn $100,000 barrier before Trump’s inauguration, according to Matt Mena, a crypto research strategist at 21Shares. This achievement wouldn’t just be psychologically impactful but also technically significant, positioning Bitcoin to surpass its previous all-time high of $108,000 and reach new unprecedented levels as market optimism flourishes. Notably, 21Shares is a globally recognized leader in the issuance of crypto-focused exchange-traded products (ETPs).

According to Mena, Trump’s consistent backing of growth-oriented policies and his preference for increasing asset values – particularly bitcoin – strengthens the optimistic perspective on bitcoin and broader risky investments.

The optimistic outlook aligns well with an uptrend in conventional assets, particularly the Nasdaq 100, which saw a more than 2% increase on Wednesday. Notably, Bitcoin has been showing a stronger positive relationship with the tech-focused index, reaching a two-year peak.

Currently, the rise in the dollar index, measuring the dollar’s worth compared to significant currencies, appears to have halted. This pause could provide some support for risky investments, as the S&P 500 is getting close to the crucial threshold of 6,000 points.

As per Mena’s analysis, surpassing the 6,000 mark might pave the way for the continuation of the worldwide bull run in assets.

Initially not supportive of digital assets, Trump started courting the cryptocurrency community in the months before the November election, promising to establish a national strategic reserve of Bitcoin. His win contributed significantly to Bitcoin’s surge from around $70,000 to over $108,000.

In an email, Nathan Cox, the chief investment officer at Two Prime, stated that if Trump announces on his first day in office his intention to establish a Strategic Bitcoin Reserve, price fluctuations may be uneven, even if he doesn’t officially sign it on day one. He further explained that once Bitcoin surpasses its previous high of $108,000, there is no ceiling to how quickly its value could grow due to the massive worldwide demand such a bitcoin reserve strategy might generate.

Two Prime functions as a SEC-approved financial advisor, with a focus on providing guidance for derivative investments in the digital assets sector.

Volatility likely

According to Paul Howard, who holds a senior position at cryptocurrency market-maker Wincent, there’s still a lack of full consideration in current market prices regarding forthcoming regulatory announcements for the digital assets sector, banking regulations, and the formation of a strategic bitcoin reserve.

The shift in U.S. administration brings potential for a turbulent week, with significant fluctuations (+/-10%) expected for cryptocurrencies like Bitcoin (BTC), Solana (SOL), Ethereum (ETH), and Ripple (XRP). The market value will be influenced by the announcements of the incoming President, meaning that some opportunities, not all, may already be factored into current prices,” Howard explained.

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2025-01-16 17:38