Bitcoin approaches a three-month high ahead of US election
Bitcoin surged by 9% over the past week and 31% since its September low, as markets bet on a potential
Trump victory in the US election on 5 November.
The world’s largest digital token topped $69,000 before retreating to around $67,000 on Monday, its
highest level since 31 July.
In euro terms, Bitcoin rose above €64,000 briefly on Monday before retreating to just over €62,300 at
5:20 am CET on Tuesday.
Bitcoin’s price is now only 8% below its all-time high of $73,000 (€64,700) set in March, when optimism
surrounding the approval of a spot Bitcoin ETF and anticipation of a major Bitcoin halving event in
April fuelled a rally.
The upcoming US election and central banks’ easing monetary policies have sustained this upward momentum
since September.
The Trump Trade
The recent surge in Bitcoin has been largely attributed to the so-called “Trump trade”, a financial
market trend reflecting the scenario in which Republican candidate Donald Trump wins the US Presidential
election on 5 November.
The former US President has been notably pro-cryptocurrency, pledging at the Bitcoin 2024 conference to
make the United States “the crypto capital of the planet” and position Bitcoin as a global superpower.
Trump also vowed to dismiss Securities and Exchange Commission (SEC) Chair Gary Gensler, promising to
“appoint an SEC chair who will build the future, not block the future” if re-elected.
According to Bloomberg data, US spot Bitcoin ETFs saw a net inflow of nearly $2.4bn (€59bn) in the six
days up to 18 October.
Bitcoin investors have been accumulating Bitcoin-related assets, speculating that US cryptocurrency
regulations will be more favourable under a Trump administration than they are under Kamala Harris.
Recent polls indicate that the race between the two candidates is extremely close, but betting markets
have shifted in favour of a Trump victory, influencing financial market trends toward assets that may
benefit from his proposed policy changes.
While some analysts predict that Bitcoin could hit $100,000 (€92,000), others caution that Trump’s
tariff policies could reignite inflationary pressures, potentially weighing on cryptocurrency markets.
Trump recently stated: “The most beautiful word in the dictionary is tariff”, during an event at the
Economic Club of Chicago.
A Bitcoin-friendly macroeconomic environment
The year 2024 has seen a resurgence of enthusiasm for cryptocurrencies, with Bitcoin up 59% year to
date.
The global macroeconomic backdrop has also played a key role in driving up crypto markets, particularly
Bitcoin prices.
Cryptocurrencies, known for their high-risk profile, have experienced a substantial rally amid central
banks’ easing cycles, particularly following the Federal Reserve’s policy shift.
Bitcoin has historically trended upwards during periods of monetary easing by the Fed.
During the 2020 pandemic, Bitcoin’s price skyrocketed by 1,600%, climbing to more than $64,000 in April
2021 from the previous year.
Recent sweeping stimulus measures implemented by China, along with signs of accelerating rate cuts by
other major central banks, may have further contributed to Bitcoin’s rally.
Simply put, loose liquidity has been a major driver behind the rise in cryptocurrency markets.
