- The price of Bitcoin has become an indicator of the political winds.
- The so-called “Trump deal” would send Bitcoin soaring to $100,000, analysts say.
- However, others believe that there are other factors that play a bigger role in Bitcoin’s fate.
Bitcoin fell nearly 3% after Donald Trump launched into a bizarre rant about immigrants allegedly eating people’s pets during Tuesday’s presidential debate.
This is the latest sign that Bitcoin is closely linked to the likelihood of Trump becoming president.
This summer, when his victory over President Joe Biden seemed certain, Bitcoin was trading at almost $69,000.
However, when Biden dropped out of the race, prices plunged 2.3%.
“Because his replacement has a higher chance of beating Trump in November — not great for crypto as a whole,” cryptocurrency analyst Noel Aitchison tweeted at the time.
Bitcoin has been hovering around the $60,000 mark since Biden dropped out, seemingly falling as Vice President Kamala Harris obliterated Trump’s lead in the polls.
Polls, Polymarket, PredictIt, and a host of other sources are helping investors choose which assets to invest in ahead of the Nov. 5 election. But the rise and fall of Bitcoin offers another barometer of predictions.
If Trump wins, Bitcoin could reach as high as $90,000 by the end of 2025, analysts at Bernstein wrote in a note Monday. If Harris wins, Bitcoin would fall to as low as $30,000.
Some, like Aitchison, have suggested that the price of Bitcoin could rise to $100,000 this year. Others believe factors other than the election have a greater impact on the price.
The debate over the “Trump trade” highlights how — for the industry at least — cryptocurrency has become a focal point in this year’s election.
Trump deal
Trump called Bitcoin a "scam" in 2021. However, in May this year, he stood up and waved the flag for the industry.
Trump has pledged to build a U.S. Bitcoin Reserve, release Silk Road creator Ross Ulbrich, and fire SEC Chairman Gary Gensler, who has been leading the U.S. government’s regulatory crackdown on cryptocurrencies.
“Digital assets have more upside under a Trump presidency as a more favorable regulatory environment is likely to develop,” Matthew Siegel, head of digital asset research at VanEck, wrote in a Wednesday investor note.
Harris, who has not spoken publicly about cryptocurrencies, is seen by some industry observers as a continuation of the Biden administration, which has been hostile to cryptocurrencies.
Does this matter?
In her Wednesday newsletter, Aitchison mentioned the drop during the debate. However, she said she was surprised that "cryptocurrencies didn't do worse." While the future of cryptocurrencies in the United States remains uncertain, the small move made her feel that the Democratic victory was already reflected in the price.
Arthur Hayes, the founder of BitMEX and a well-known cryptocurrency trader, told DL News in August that it doesn’t matter who sits in the Oval Office.
“You can say these nice words and try these policies, but if the entire government apparatus is against them, nothing will get done.”
It’s not just election uncertainty that’s keeping crypto markets on edge.
The Federal Reserve’s rate cut this month and fears of a recession will play a key role in bitcoin’s future performance, Quinn Thompson, founder of the Lekker Capital crypto hedge fund, told DL News last month.
