Donald Trump may trigger a massive Bitcoin bull run if he wins the presidential election, according to the Financial Times. Bitcoin has been extremely bullish this year already, mostly due to the approval of spot Bitcoin ETFs.
Since their launch in January, Bitcoin has broken two all-time highs and mostly stayed above $60,000.
Until now.
In the past five days, Bitcoin has tumbled below $54,000 for the first time since February. At press time, it has rebounded a little, sitting pretty at around $56,000.
Trump, the Bitcoin champion
The hilarious Donald Trump has shown a lot of love to the crypto industry recently. The man hostes crypto mining executives at Mar-a-Lago, started accepting contributions in crypto, and has generally been making positive statements on crypto.
Industry leaders hope that a Trump administration, along with a strong Republican presence in Congress, will lead to clearer and more favorable environment for crypto to thrive.
Donald Trump with Tyler and Cameron Winklevoss. Credits: Tyler Winklevoss
However, there are also concerns about what a Trump presidency might mean for traditional financial markets. Right now, the expectations are that Trump’s policies would increase the deficit, leading to higher inflation and Treasury yields.
Standard Chartered’s Geoff Kendrick believes Trump’s policies could lead to “fiscal dominance,” where government deficits and debt grow so large that the Federal Reserve become powerless to fight it.
This would, of course, affect Bitcoin’s price since the crypto diva is unfortunately intertwined with key US Treasury markers. Geoff argues that a steeper curve and higher break-even rates than real yields would push Bitcoin’s price higher.
President Joe Biden and Vice President Kamala Harris. Credits: CNBC
Meanwhile, the Trump trade partly relies on Joe Biden being Trump’s opponent in November. Now if Biden drops out of the race and Kamala Harris takes over for him, then we might be looking at completely different odds.
Polymarket bets on Joe dropping out have hit over $11 million, putting it at 61%.
Source: Polymarket
As for Bitcoin, its performance has been quite terrible. Sales by miners and recent movements by US and German authorities, along with Mt. Gox’s repayments have shook the market.
Geoff thinks that by late July, if it becomes clear that Biden will run, the probability of Trump winning will obviously increase, potentially driving Bitcoin higher.
He has predicted that BTC will break another all-time high in August and hit $100,000 by Election Day.
Reporting by Jai Hamid
