As an analyst with over two decades of experience in the financial markets, I must admit that the current Bitcoin rally is reminiscent of the wild West, albeit with more technological firepower. The parallels between the 2016-2017 bull run and the present situation are striking, especially when considering the role of a certain real estate magnate turned politician who has shown a keen interest in Bitcoin and cryptocurrencies.
In a recent blog update, analysts Nathan Frankovitz and Matthew Sigel from VanEck’s Digital Assets team have noted that the value of Bitcoin has significantly increased during a high-volatility rally following the elections. These experts suggest that Bitcoin is currently in unprecedented territory, without any significant technical resistance to its price.
The VanEck team notes that the current trend resembles incidents from four years back, when Bitcoin’s value nearly doubled between the 2020 election and year-end, and then went on to increase by an extra 137% in 2021. As stated in their blog post, VanEck is experiencing a growing number of incoming calls as investors realize they have insufficient exposure to this asset class.
On November 5th, election night, Bitcoin soared about 9% to unprecedented peaks of around $75,000, according to analyst reports. This surge in Bitcoin price was mirrored by the odds suggested by Polymarket, which indicated Donald Trump was gaining an advantage in the race. Interestingly, the VanEck team observed that such a rise in Bitcoin’s price often follows improvements in Trump’s odds on the Polymarket platform, as seen after his assassination attempt.
As per the VanEck report, Trump emphasized Bitcoin and cryptocurrencies during his campaign, pledging to alter the Securities and Exchange Commission’s enforcement-based regulation strategy and make America a global leader in crypto and Bitcoin. The analysts assert that, with Trump as president-elect, we are seeing regulatory challenges transform into opportunities for the first time.
According to VanEck’s report, Trump has begun placing pro-cryptocurrency individuals in key government roles. This happens under the unified Republican administration, raising the possibility of favorable cryptocurrency-related legislation. The blog post also hints at potential bills such as establishing a national Bitcoin reserve; these proposals have approximately a 34% chance of being passed, according to current betting markets (as of November 19th).
In terms of worldwide interactions, it’s been noted by analysts at VanEck that countries such as those in the BRICS bloc are considering digital currencies like Bitcoin as potential workarounds for US dollar sanctions and intervention in foreign exchange. They suggest that stablecoins could provide a tactical advantage for dispersing the influence of the U.S. dollar across the globe.
The VanEck team predicts that the Securities and Exchange Commission (SEC) or Congress may repeal the SAB rule during Trump’s first quarter. In 2025, they believe that U.S.-based Ethereum ETFs will be updated to accommodate staking, and the SEC is expected to approve the Solana ETF 19b-4. Moreover, in-kind creation and redemption could make these ETFs more tax-efficient and liquid.
According to VanEck analysts’ findings on market indicators, Bitcoin’s dominance 7-day moving average increased by 2 points this month, reaching 59%, a level not observed since March 2021. They also point out that this marks an upward trend from 40% in November 2022.
With respect to regional trading patterns, VanEck’s team has noted a substantial increase in Bitcoin holdings among traders, particularly during Asian market hours, throughout this month. It’s important to note that the spike in Bitcoin’s price on election night coincided with Asian trading hours. This surge might be attributable to an unusually large number of US-based investors actively trading Bitcoin around the election time.
According to VanEck’s analysts, they hold firm to their prediction of Bitcoin reaching $180,000, as crucial signs they follow suggest an ongoing bullish trend for this rally. They emphasize that the current election could be a significant catalyst, potentially shifting years of outflowing jobs and resources, which had been driven by past leaders with more aggressive policies.
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2024-11-23 21:14