United States President Joe Biden shocked the markets when he announced that he would not seek a second term in the White House, sparking diverse reactions among analysts trying to predict the future of #Bitcoin❗️ (BTC) and other crypto assets.
Immediately following Biden's announcement, the BTC price dipped by as much as 2.8%, touching a low of $65,800. However, it quickly rebounded to trade at $67,916 at press time.
Market Reactions to the Joe Biden Announcement
eToro market analyst Josh Gilbert described Biden’s sudden move as a “win for crypto assets.” He emphasized that former President Donald Trump’s heightened chances of re-election could be a significant boost for the cryptocurrency market. Gilbert stated:
“The longer that we see Trump staying ahead in the election odds, the more crypto assets will price in his victory."
However, he also noted the uncertainty of the situation, highlighting that with three months left in the election race, significant changes could still occur.
Trump's Crypto-Friendly Stance
Trump has recently integrated Bitcoin and cryptocurrencies into his re-election campaign. On June 14, he declared that he would end the Biden administration’s “war on crypto” if re-elected. Markus Thielen, founder of 10X Research, also suggested that Trump might make a significant announcement regarding Bitcoin at the upcoming Bitcoin 2024 conference in Nashville on July 25.
Thielen pointed out that the US government currently holds 212,800 BTC, valued at approximately $15 billion. In contrast, it holds around $600 billion in gold reserves. If the government were to double its Bitcoin holdings, it would have a comparable price impact to the net inflows into spot Bitcoin exchange-traded funds (ETFs) year-to-date.
Looking ahead, Gilbert anticipates a bullish trend for Bitcoin, driven by the upcoming launch of spot Ethereum (ETH) ETFs in the US. This development could serve as a catalyst for growth across the crypto market.
Caution Amid Optimism
Despite the optimism, some analysts urge caution. Swyftx analyst Pav Hundal warned that while Biden’s withdrawal might boost Trump’s chances, the recent bounce in crypto prices might not be directly linked to this political shift. Hundal highlighted the importance of learning from past experiences, such as the Bitcoin #ETF speculation, which saw temporary price stalls before an uptrend.
“Learning from the Bitcoin ETF experience, we could see a temporary stalling of prices before the uptrend continues,” he said. “This recent surge might be attributed to early Ethereum ETF speculation, and it’s important for investors to stay cautious and not get overly excited in the short term.”
Gary Black, Managing Partner at The Future Fund, also expressed skepticism. He reminded his 433,000 followers on X that a Trump victory was not guaranteed, given the public’s distrust of Trump following the events of Jan. 6.
“Those who think Trump/Vance will win by a landslide are getting ahead of themselves,” Black commented in a July 22 post. “The American public doesn’t trust Trump after the events of Jan 6th. I was no fan of Biden or Kamala, but Dems could still nominate Newsom, Michelle Obama, or another leading Dem to be their Presidential candidate.”
While Biden’s decision not to seek re-election has generated optimism among some crypto enthusiasts, the political landscape remains uncertain. Analysts recommend a cautious approach, advising investors not to get too excited about a potential Trump victory just yet. As the election race progresses, the interplay between politics and the crypto market will continue to unfold, potentially shaping the future of digital assets.
Traders on the decentralized betting platform Polymarket are confident that Harris could be the next Democratic nominee for this election. “Yes” shares on the platform surged to 81 cents, meaning traders forecast an 81% likelihood that she will replace Biden.
Bets on who will win this Presidential election (Source: PolyMarket)
Meanwhile, “Yes” shares for Trump to win the 2024 Presidential Election stood at 64 cents, indicating a 64% chance, according to traders on Polymarket. Shares in favor of a Harris victory stood at 29 cents, while “Yes” shares for Michelle Obama stood at 3 cents.
