In a surprising turn of events, U.S. President Joe Biden has announced he will not run for a second term in office, sending shockwaves through the markets. This unexpected decision has left analysts divided on its potential impact on Bitcoin and other crypto assets.
Immediate Market Reaction
Following Biden's announcement, the price of Bitcoin initially fell by 2.8%, hitting a low of $65,800. However, the cryptocurrency quickly rebounded, gaining over 3.6% within the next 8 hours, according to TradingView data.
Analysts' Views
Positive Sentiment
Josh Gilbert, a market analyst at eToro, described Biden’s exit as a “win for crypto assets,” citing Trump’s increased chances of reelection as a significant boost for the crypto market. Gilbert believes that Trump’s pro-crypto stance could positively influence market sentiment and drive further adoption.
“It’s difficult to envision Kamala Harris or another Democrat candidate overturning Trump’s lead in the polls with just three months left in this election race, but a lot can happen in that time frame, so nothing is off the cards,” Gilbert explained.
Long-Term Outlook
Markus Thielen, head of research at 10X Research, suggested that a Trump presidency could position Bitcoin as a strategic reserve asset. In his report, Thielen highlighted the U.S. government’s current Bitcoin holdings of 212,800 BTC (approximately $15 billion) compared to its $600 billion in gold reserves. He posited that doubling the government’s Bitcoin holdings could significantly impact the market, akin to the net inflows into spot Bitcoin ETFs this year.
Cautious Optimism
While some analysts are optimistic, others urge caution. Swyftx analyst Pav Hundal warned that Biden’s withdrawal might not directly correlate with a sustained crypto rally. He emphasized the need for cautious optimism, citing the recent surge in Ethereum ETF speculation as a potential factor driving current price movements.
Gary Black, Managing Partner at The Future Fund, also advised caution. He reminded his followers that a Trump victory is not guaranteed, despite the current political landscape. Black noted that other Democratic candidates, such as Gavin Newsom or Michelle Obama, could still emerge as strong contenders.
