As Trump leads in critical swing states, Bitcoin prices touch $75,000, marking the second historical high of the year. It turns out that Bitcoin is the most sensitive asset in the U.S. elections.
On October 29, Bitcoin, which had been stumbling for 3 months, finally stood above $70,000 again. $70,000 seems to be a key integer level, being the peak of the 2021 bull market and a psychological integer level for many people's judgment on whether to enter the market. Bitcoin's first historical high this year was $73,777 in March, thanks to the boost from ETFs; while the second new high led the community to jest, 'Maybe we should elect a president every day.'
GSR research analyst Toe Bautista stated that from the perspective of altcoins, many project teams have been waiting for the right moment, observing the issuance of other tokens and the election results. He also believes that if macro conditions remain favorable, Bitcoin prices may rise further. 'It’s easy to foresee Bitcoin reaching $80,000, whether in Q1 of next year or by the end of the month.'
Election expectations are about to materialize
The final result will also be determined a few hours after Bitcoin breaks the historical high, and Trump is currently in the lead.
Related Reading: (The most critical day of the election is closely contested | Overview of real-time data and information on the U.S. elections)
The cycle of the U.S. elections and the cycle of Bitcoin are so closely aligned that it was only perceived in the cryptocurrency space this year. Trump's unexpectedly friendly stance towards Crypto and Bitcoin has excited half of the industry while alarming the other half. He has attended Bitcoin conferences to give speeches and launched his own DeFi products, declaring 'Let Bitcoin be a strategic reserve of the United States,' which has significantly boosted the overall market's recognition of Trump's potential victory, providing great benefits to the crypto community.
Bitfinex analysts stated, 'The narrative of the 'Trump trade' and favorable seasonal factors in Q4 have created a perfect storm for Bitcoin. Although prices may fluctuate before the election, an exciting period is still ahead.' The options market also reflects an optimistic outlook for Bitcoin, with bullish positions suggesting that the price of Bitcoin, the largest digital asset by market capitalization, could rise above $80,000 by the end of the year.
ETF Inflow
The ETF garnered much attention upon its launch, primarily due to a large influx of new funds, and Bitcoin prices also reached new historical highs. However, soon after, total ETF funds began to see net outflows, and market sentiment started to decline.
Rhythm BlockBeats has been tracking the inflow of ETFs, and the data charts show that August 8 was the lowest point in this phase, with funds continuously flowing in over the past few months.
Interest Rate Cut
The Federal Reserve cut interest rates by 50 basis points in September, significantly exceeding expectations, and Bitcoin responded by rallying at that time. Now, the expectation for November is a 25 basis point cut, which is generally understood by the market as a positive factor, especially since the previous bull market started from the rate cut in March 2020.
Historical Data for November
In addition to the data, there’s also a sense of ceremony.
According to Coinglass data, Bitcoin's investment returns in the fourth quarter after halving in 2012, 2016, and 2020 performed well, at 97.7%, 58.17%, and 168.02%, respectively. Among them, the return rate in November 2016 was 5.42%, the return rate in November 2020 was 42.95%, and this month's return rate is still worth anticipating.
It is worth noting that Bitcoin rose by 7.35% in September this year, marking its best historical performance. Historically, every time Bitcoin has seen a rise in September, it has managed to increase until the end of the year.
