Bitcoin

Traders look to Trump crypto trade to lift declining bitcoin price

Published

7 months ago

6 July, 2024

Traders look to Trump crypto trade to lift declining bitcoin price

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Hello and welcome to the FT Cryptofinance newsletter. This week we take a look at the outlook for bitcoin in the second half of the year.

As the US presidential election approaches, cryptocurrency traders and analysts are hoping that a Donald Trump victory in November will shake the price of bitcoin out of its recent stupor.

The coin, a decent proxy for all crypto activity, peaked in mid-March and has struggled to make headway since April’s so-called halving event, when the number of daily bitcoins available for miners to share to secure the bitcoin network fell from 900 to 450. It has since fallen about 15 percent and on Friday fell below $54,000 to its lowest point since February. That belied many predictions that post-halving bitcoin would begin to recover.

Analysts suggested the weak performance was due to the number of potential sell-offs looming over the market: $9 billion in bitcoin and bitcoin cash sales from the now-defunct Japanese exchange Mt Gox; possible bitcoin sales by miners; and the signal sent over the past two weeks by authorities in the US and Germany transferring portions of criminal seizures to cryptocurrency exchanges.

“Both authorities hold over $15 billion worth of bitcoin, which is enough potential selling pressure to make short-term bitcoin holders nervous,” said analysts at Ryze Labs, a cryptocurrency venture capital firm.

Traders have also noted the effect of bitcoin basis trading — in which hedge funds use borrowed money to bet on the price of bitcoin futures and spot bitcoin ETF convergence — in reducing volatility.

As the market searches for the next catalyst, talk of a “Trump trade” — a potential second-half rally in bitcoin on the back of a November victory for the former president — has grown. That belief has only grown since last week’s presidential debate.

The optimism boils down to two perceptions: that Trump is the most pro-crypto candidate and that his policies will make assets like bitcoin more attractive to the rest of the world.

He is now more open to courting the cryptocurrency hosting industry. mining executives at Mar-a-Lago, accepting cryptocurrency contributions and generally making positive comments.

Industry executives hope that a Trump White House and a strong Republican showing in Congress will mean that Washington is more receptive (finally) to passing clear and favorable regulations for cryptocurrencies.

“Cryptocurrency mining companies are also likely to benefit, particularly from Trump’s energy policy proposals, which could allow the use of other energy sources for bitcoin mining,” said Manuel Villegas, an analyst at Julius Baer.[President Joe] Biden’s previous tax proposals on cryptocurrency miners, such as a 30% tax, are unlikely to happen under a Trump administration,” he added.

The second insight is a question that is starting to filter into traditional finance as well: what will Trump 2.0 mean for financial markets more broadly?

The current market expectation is that stricter immigration policies, more tariffs on foreign goods and tax cuts would increase the US deficit and lead to higher inflation and higher US Treasury yields.

Geoff Kendrick, an analyst at Standard Chartered, argues that Trump’s policies could create “fiscal dominance,” when the government deficit and debt grow so large that the central bank’s main weapon, interest rate changes, has only limited impact.

This would affect bitcoin’s price, he said, because the cryptocurrency tends to have a reasonable correlation with some crucial U.S. Treasury benchmarks, such as the spread between 2-year and 10-year Treasury bonds and breakeven rates.

A steeper curve and higher breakeven rates than real yields should push up bitcoin’s price, he argues, because the currency acts as a good hedge against falling confidence in the U.S. Treasury market.

Trump’s trade is based in part on Biden being his opponent in November. The RealClearPolitics Betting Average, a composite of prediction sites, puts Trump at 55 percent and Biden’s chances at just 16.5 percent, having fallen in the past week.

This suggests that if Biden stays in the race, bitcoin bulls will be energized. If he leaves and the new candidate is seen as having a chance against Trump, bitcoin could remain in the doldrums.

Then again, it may not matter. Theories about bitcoin, from an inflation hedge to an alternative to the financial system, tend to disintegrate when faced with reality.

But that’s beside the point. As Ben Hunt, chief investment officer at asset manager Second Foundation, eloquently puts it: he wrote In his Epsilon Theory blog this week, “behavior changes ONLY when we believe everyone else believes the information.” If enough people think Trump will win, the cryptocurrency market will move.

The most likely outcome, Kendrick says, is that by the end of July it becomes clear that Biden will run, the probability of Trump winning increases even more, and bitcoin goes up. “A new all-time high [high] probably in August, so $100,000 by US election day.”

All markets need a narrative to sustain their momentum. But bitcoin, which has no cash flows, needs it more than most. As the market clears out excess selling, expect this to build over the summer.

What do you think? Email me at philip.stafford@ft.com

Weekly Highlights

Defunct California Bank Silvergate go pay $63 million to resolve civil charges brought by federal and state regulators related to the bank’s collapse following the massive fraud that took down cryptocurrency exchange FTX.
The US Marshals Service has chosen Coinbase to custody the crypto assets it seizes as part of U.S. government criminal investigations. In the past, the agency has seized assets belonging to Silk Road and Mt Gox. The five-year contract is worth $32.5 million.
Bitcoin mining firm Genesis Digital Assets, in which now-defunct trading group Alameda Research invested $1.15 billion, is considering a U.S. IPO, Bloomberg reported.

Data Mining: On the Rebound

Here’s another indicator of the slowdown in crypto markets. Centralized crypto exchanges had a strong first half of the year, with total aggregate spot volumes up $10.6 trillion from $4.32 trillion in the second half of last year, according to CCData. March was a record high, it added. The driver was mainly the arrival of US spot bitcoin ETFs. However, the chart also shows how the post-halving lull has hit volumes.

Cryptofinance is edited by Laurence Fletcher. To view previous issues of the newsletter, click here.

Your comments are welcome.

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Bitcoin

What to watch for in the markets

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Photo: Andrew Harnik (Getty Images)

After witnessing one of the largest global IT outages on record, affecting the travel, finance and healthcare sectors worldwideThis week is set to see more political drama, events, and earnings reports from tech giants.

Donald Trump’s ‘Lovefest’ Sets Jamie Dimon Up for Consideration for Treasury Secretary Job

Let’s take a look at what awaits us:

Major companies will release their earnings reports

Major tech companies and others will release their earnings reports this week, paving the way for what the second half of 2024 will look like.

Monday

Verizon will report earnings before the start of operations.

Tuesday

Coca-Cola, Comcast and UPS are all set to report earnings before the market opens.
Tesla will report earnings in the morning, while General Motors will report earnings in the evening.
Alphabet and Visa will report results after the market closes.

Wednesday

AT&T will release its report before the market opens.
Ford and Chipotle will report earnings after the market closes.

Thursday

Earnings reports from AstraZeneca, American Airlines and Southwest Airlines will be released before the market opens.

Trump to speak at Bitcoin conference

Presumptive Republican presidential nominee Donald Trump will speak at the next Bitcoin Conference in Nashville, Tennesseewhich is scheduled for July 25-27. While this is the first time a presidential candidate will attend the conference, it has sparked a debate over whether the crypto-friendly Trump will receive support from the crypto community in the upcoming election.

In addition to Trump, independent presidential candidate Robert F. Kennedy Jr. will also discuss crypto during the conference. Crypto advocates such as ARK Investment’s Cathie Wood, MicroStrategy’s Michael Saylor, and whistleblower Edward Snowden are among some prominent names who will be participating in the conference.

Ether ETFs are on the way

New Ether Spot ETFs are set to begin trading on Tuesday, July 23. Much like the spot Bitcoin ETFs, these ETFs will allow investors to buy the second most popular cryptocurrency like stocks. BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital are all set to offer Ether ETFs. Crypto asset manager Bitwise predict that trading in the Ether ETF will drive the price of Ether higher, potentially surpassing $5,000.

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Bitcoin

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Bitcoin miners and cryptocurrency companies that have been blocked from going public in the U.S. could ultimately be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share could end up being the biggest losers.

That’s the view that’s taking hold among market participants and observers in the wake of the former president’s growing embrace of cryptocurrency as his chances of election grow. survey released Thursday by CBS News showed Trump with the majority — 52 percent — of likely voters in his likely November rematch with President Joe Biden.

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Bitcoin

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Cryptocurrency investor Chris Burniske says Bitcoin (BTC), Ethereum (ETH), Solana (SUN) and the cryptocurrency market in general seem poised for a run.

Former Head of Cryptocurrency at ARK Invest account his 292,200 followers on social media platform X that several catalysts are aligning, suggesting that digital asset markets are on the verge of a bull run.

According to Burniske, a partner at venture capital firm Placeholder, the highly anticipated launch of Ethereum-based exchange-traded funds (ETFs), Republican presidential candidate Donald Trump speaking at an upcoming Bitcoin event, and the current state of the BTC, ETH, and SOL charts all suggest significant optimism for the cryptocurrency markets.

“With ETH ETFs set to go live, Trump speaking at The Bitcoin Conference, and BTC, ETH, and SOL charts looking [they do] (while stocks are weak), it’s hard to imagine a world where we don’t ship next week.”

Reuters recently reported that preliminary approval for ETH ETFs has been granted as the Bitcoin Conference is scheduled to take place from July 25-27.

BTC, ETH, and SOL are trading at $67,333, $3,528, and $174 at the time of writing, respectively.

The venture capitalist too provides an update on his prediction that the total crypto market cap will eventually hit $10 trillion. According to his chart, the path to $10 trillion is currently “23%” complete, as it sits around $2.2 trillion.

Source: Chris BurniskeX

Earlier this month, Burniske he said in an interview with Real Vision CEO Raoul Paul that he has his eye on the Move ecosystem, which was originally built by social media giant Meta and then used to develop layer 1 blockchains Sui (IUE) and Apts (APT).

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Bitcoin

Here’s the next target for BTC before bulls can hold out for $70K

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Here’s the next target for BTC before bulls can hold out for $70K

Bitcoin’s recovery is going well, and the market is seemingly poised to create a new all-time high in the near term.

Technical analysis

Per NegotiationRage

The daily chart

As the daily chart shows, the price of Bitcoin has been rising since it broke above the 200-day moving average.

The market has also reclaimed the $60K and $65K levels and is moving towards the $68K resistance zone, which could be the last hurdle before creating a new all-time high. With the RSI also indicating that the price has clear bullish momentum, it could be just a matter of time.

Source: TradingView

The 4-hour chart

Looking at the 4-hour chart, it is evident that the price has been rising rapidly since breaking the downtrend line to the upside. The market also broke the $65K resistance level with momentum, turning it into a support.

While almost everything points to a new record high in the coming weeks, there is one worrying sign. The RSI is showing a clear bearish divergence between recent price highs, which could indicate a correction or even a reversal in the near term.

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Cryptocurrency Charts by TradingView.

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