Political Factors Are Secondary to Bitcoin Price: This Will Determine Its Fate!

The fate of Bitcoin (BTC) may have more to do with the performance of the dollar than US politics.

The recent increase in Bitcoin price has been interpreted as being related to market expectations of the weakening US dollar rather than speculation about the US elections.

The analysis published by the cryptocurrency company Copper on July 22 stated that Bitcoin's recent price rise occurred in an environment where former US President Donald Trump's re-election probability increased.

However, he emphasized that the main reason behind this rise is market expectations that the US dollar will lose value against other currencies.

Bitcoin has gained more than 6% over the past seven days, rising from around $63,500 on July 15 to around $68,000 at the time of writing. This movement was interpreted as Bitcoin generally moving in parallel with the decline of the US Dollar Index (DXY) and that the weakening of the dollar could increase the value of risk assets such as Bitcoin.

Copper's head of research, Fadi Aboualfa, noted that Bitcoin's dynamics tend to move inversely to the strength or weakness of the US dollar. He also stated that a management that provides growth can direct investors to more volatile asset classes.

Bitcoin's dynamics are more complex and tend to move in the opposite direction of the strength or weakness of the US dollar. Additionally, any management that delivers growth will see investors return to more volatile asset classes. If markets continue to expect a Republican win this year, there could be an assumption about the potential for the US dollar to weaken, especially given that it is currently trading at its highest level since 2002.