The first half of 2024 was very successful for Bitcoin (BTC), which hit an all-time high of over $73,500 in mid-March. It has increased by about 115% over the past year.
In the following sections, we’ll explore key factors and upcoming events that might help Bitcoin reach a new peak before the year ends.
Upcoming U.S. Election and Its Potential Impact on Bitcoin (BTC)
The results of the upcoming U.S. election in November could lead to increased volatility for Bitcoin (BTC). The main contenders are current President Joe Biden from the Democratic Party and Republican nominee Donald Trump.
Trump has positioned himself as a favorable choice for pro-crypto voters, promising to support the crypto industry, boost Bitcoin mining efforts in the U.S., and oppose the introduction of a central bank digital currency (CBDC). Recent polls show Trump leading with 42.3% of the vote, while Biden trails with 40.3%.
Additionally, Trump recently survived an assassination attempt during a speech in Pennsylvania. The 20-year-old gunman only grazed his ear, and Trump’s life is reportedly out of danger. The news of his survival led to a positive reaction in the crypto sector, with the global market cap briefly exceeding $2.5 trillion. It will be interesting to see how Trump’s potential election as the 47th president might influence Bitcoin’s price.
Potential Impact of Federal Reserve’s Policy Shift on Bitcoin (BTC)
In response to the economic fallout from the COVID-19 pandemic, the U.S. central bank implemented a stringent anti-inflation strategy. The pandemic caused widespread job losses, isolation, financial instability, and other challenges. To support the struggling economy, the Federal Reserve raised interest rates 11 times consecutively from March 2022 to July 2023. The current rate stands at 5.25%-5.50%, with expectations of a possible pivot in the coming months.
Traditionally, the Fed was expected to wait until inflation cooled to the 2% target before considering lowering rates. However, earlier this week, Chairman Powell indicated that the Fed might act sooner. He suggested that waiting for inflation to reach 2% might be too late, as the current level of tightness could already drive inflation below that target.
The next Federal Open Market Committee (FOMC) meetings are scheduled for July 31 and September 18. There is speculation that an interest rate cut could occur after the September meeting. Lowering the benchmark rate would make borrowing cheaper, potentially increasing interest in risk-on assets like Bitcoin (BTC). This influx of new capital could spark a further rally in the cryptocurrency market.
The Bitcoin Halving and Its Historical Impact
The latest Bitcoin halving occurred in April of this year, an event that happens roughly every four years and reduces the daily issuance of Bitcoin by half. Historically, Bitcoin halvings have often preceded significant rallies in both Bitcoin and the broader crypto market. At the time of the halving, Bitcoin was valued at around $64,000 and briefly surged above $71,000 a month later.
However, analysts have noted that Bitcoin’s price typically peaks about a year or more after previous halvings in 2012, 2016, and 2020. This pattern suggests that Bitcoin may still be on track to reach new highs, provided it follows the historical trend seen after past halvings.
⚠️Disclaimer
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.
