Matrixport released a report saying that in early February 2024, (Matrix on Target) predicted that the price of Bitcoin will reach$70,000, when the price of Bitcoin was about $42,000. Although some people think this prediction is conservative, it is a significant increase of +65% from the price at that time. As of now, the price of Bitcoin is$70,000The fluctuations below show that there are still challenges to overcome in breaking through this psychological barrier, but the overall forecast is roughly accurate.
There are many connections between Bitcoin and the US election:
1. Influence of candidates’ positions and policy proposals
Since Harris was interviewed by Fox News last night, Trump's approval rating on the Polymarket platform has reached 62.1%, leading Harris by 24%. We believe that Bitcoin is expected to break through the $70,000 mark, and the development of the US political situation will affect market sentiment. If Trump is re-elected as president in 2025, it is expected that his support for business and skepticism of the Federal Reserve's policies will provide a good environment for Bitcoin. Although Trump has criticized cryptocurrencies, his attitude took a 180-degree turn at the 2024 Bitcoin Conference. He said that if he returns to the White House, he will be committed to making the United States the world's "cryptocurrency capital" and "Bitcoin superpower" and his policy direction will be beneficial to the market development of Bitcoin.
He promised that if elected he would immediately fire current SEC Chairman Gary Gensler and appoint a new one.
Establish a Bitcoin and Cryptocurrency Advisory Committee to be responsible for design, regulation and guidance;
Order the Treasury Department and other federal agencies to halt development of a central bank digital currency;
Ensure that the federal government will never sell its Bitcoin holdings and keep them as a “strategic reserve asset.”
Compared with Trump, Harris expressed support for cryptocurrencies, but emphasized the importance of regulation. Her statement was relatively cautious, and her support for cryptocurrencies was more based on regulating industry development and protecting investors.
Therefore, the predicted price of $70,000 by the end of the year is accurate, but perhaps too conservative. Last week, we noticed that investors had not yet begun to position for a Trump victory. Since then, Bitcoin has seen a sharp 8% increase. As the probability of a Trump victory rises rapidly, it is increasingly likely that we will see a stronger return of Bitcoin.
2. Changes in market sentiment and investor expectations
1. Fluctuations caused by uncertainty: During the US election, the uncertainty of the political situation tends to increase investors' risk aversion. As an asset with certain risk aversion properties (although its risks are also high), Bitcoin may attract investors' attention during the election. Investors will adjust their investment strategies for Bitcoin based on the progress and expected results of the election, which will lead to fluctuations in Bitcoin prices.
2. Expectations of economic policies: The election results will affect the new government’s economic policies, such as fiscal stimulus plans, monetary policies, etc. If the market expects that the new government’s policies will lead to a depreciation of the dollar or rising inflation expectations, investors may use Bitcoin as an asset to hedge against inflation, thereby affecting the demand and price of Bitcoin.
3. Chain reaction to global financial markets:
The United States is an important participant in the global economy. The results of the U.S. election will not only affect the domestic financial market in the United States, but also have a chain reaction on the global financial market. As a global cryptocurrency, Bitcoin's market will also be indirectly affected by the results of the U.S. election. For example, if the results of the U.S. election trigger fluctuations in the global financial market, it may cause funds to flow to safe-haven assets such as Bitcoin, pushing up the price of Bitcoin; conversely, if the global financial market tends to stabilize, the safe-haven demand for Bitcoin may decline.
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