- Bitcoin has surged in the last week to reach $66,000.
- Market observers cite the upcoming US election as a reason for the rise.
- The question is if the rally can be sustained.
The Bitcoin price reached $66,000 on Tuesday, marking a 5% gain in the last week thanks to renewed bullishness in Donald Trump’s campaign.
While the price has slumped slightly, analysts predict this is just the beginning of a new crypto rally.
Bernstein analysts say the resurgent Bitcoin market is tied to crypto bettors casting their lot behind Donald Trump’s candidacy for the US presidency.
“The recent Bitcoin strength is driven by a return of Bitcoin correlation to Trump election odds,” Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia wrote in a note on Tuesday.
Trump holds a 13-percentage point lead over Vice President Kamala Harris on Polymarket, the crypto prediction market.
While Trump’s lead on the site has been bigger, Harris briefly upstaged the former president after indicating support for digital assets. At the time, Polymarket was in line with mainstream election polling data.
The trend has, however, reversed with Polymarket back to being at variance with mainstream polls.
In the national polls, Harris has a 2% lead in FiveThirtyEight’s poll of polls.
While Bernstein analysts predict the election’s outcome will have little effect on Bitcoin in the long term, they said Bitcoin’s price could sharply rise as high as $90,000 if Trump wins in November and slump to $30,000 if Harris emerges victorious.
Crypto’s election
The industry is heavily invested in this year’s election.
Crypto luminaries have thrown their weight in this election cycle like never before. That has led to hundreds of millions of dollars spent in lobbying to garner influence among the powers that be in Washington.
Still, other factors are driving Bitcoin’s price outside of the White House race.
On the institutional side, the markets recorded $550 million in spot Bitcoin exchange-traded fund inflows ― more than half of the largest-ever recorded daily flow and the biggest since early June.
Monday’s massive inflow took the cumulative Bitcoin ETF flows to over $19 billion, data from UK crypto fund Farside Investors shows.
That’s within distance of the optimistic $32 billion projected by market analysts at the top of 2024 when Bitcoin ETFs were approved in the US.
While Bitcoin ETFs spurred Bitcoin to a new peak of $73,000 in March, the market has lulled significantly.
Bernstein analysts, however, argue that it has been a “gestation period” for the market.
The analysts said that they believe global asset managers have been working hard to hawk the Bitcoin ETFs to institutional players such as private banks and wealth advisors.
“This gestation and distribution will start to pay off and reflect in accelerated inflows reflexive to Bitcoin price,” the analysts wrote.
Crypto market movers
- Bitcoin is up 1.7% over the past 24 hours to trade at $65,660 at the time of writing.
- Ethereum is up 3.5% to trade at $2,616.
What we are reading
- BlackRock’s Larry Fink on what’s really driving Bitcoin: ‘I truly don’t believe it’s a function of regulation’ ― DL News
- Tether Explores Lending to Commodity Traders: Report ― Unchained
- DBR liquidity bootstrapping gets underway on Jupiter’s launchpad ahead of deBridge token launch ― The Block
- Ethena Labs Proposes Onboarding SOL as Backing Asset to USDe ― Unchained
- Here’s why crypto companies are suing the SEC in the US South — DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.