Driven by the victory of former U.S. President Donald Trump in the election, Bitcoin performed strongly throughout November, continuously setting new historical records. This flagship cryptocurrency is expected to record one of its best monthly gains this year.
According to Coin Metrics, Bitcoin rose approximately 38% in November, marking its best performance since February. At that time, Bitcoin rose 45% due to the launch of a spot Bitcoin ETF. Additionally, this is the first time Bitcoin has reached an annual high since November 2021.
As of the latest data, Bitcoin rose 2.66% intraday, reaching $97,376.77, having earlier touched $98,722. Meanwhile, stocks related to Bitcoin performed variably.
Expectations of Trump's re-election boosted market sentiment
During November, expectations of Trump's re-election boosted market sentiment.
During his campaign, Trump emphasized that he could provide a clear regulatory framework for the crypto industry and lead the sector out of a 'dark period.' This 'dark period' is believed to be closely related to the SEC chairman Gary Gensler's tough enforcement style and the lack of clear regulations for digital assets.
Trump's victory will continuously push the price of Bitcoin towards the historic milestone of nearly $100,000. This outcome is viewed not only as a symbol of the legitimacy of the crypto industry but also as a catalyst for macroeconomic changes, such as an expanding budget deficit, rising inflation, and the potential weakening of the dollar's international status.
These factors collectively drive investors' demand for Bitcoin to continue to heat up.
ETF inflows support Bitcoin's rise
After Trump's victory, the Bitcoin ETF market experienced significant inflows. Bitcoin ETFs, represented by BlackRock's IBIT fund, recorded the largest single-day inflow in history at one point. This influx of funds effectively offset some of the selling pressure from long-term holders taking profits after the price hit new highs.
Additionally, Bitcoin ETF options trading officially launched in November, providing the market with new investment and speculation tools, further enhancing market activity.
Bulls expect Bitcoin's price to break $100,000 by the end of 2024, and possibly double by the end of 2025.
Although the U.S. election has temporarily boosted Bitcoin's price, many investors believe the impact of Trump's victory will extend throughout 2024.
From a regulatory perspective, the risks associated with Bitcoin have significantly decreased, and its role and trading method as digital gold have become clearer, providing confidence to investors. Particularly, the halving in April this year reduced Bitcoin's supply, while institutional and national demand for Bitcoin as a treasury reserve asset continued to grow. This supply-demand imbalance is believed to be a major driving force behind the surge in Bitcoin's price.
Historical data shows that Bitcoin's price typically peaks about a year after halving. Therefore, investors generally expect that as demand for Bitcoin continues to expand, the price of this cryptocurrency may continue to rise in the coming years.
