Bitcoin Hits ATH as Trump Victory Boosts Crypto
London: 15 Novemebr 2024 (TraderMade): The past fortnight has been monumental for the cryptocurrency market, with US election drama, institutional milestones, and altcoin surges shaping the landscape. Here's a deep dive into the highlights.
Key Takeaways
- Bitcoin surged past $73,000 to new ATHs after Trump's election victory.
- BlackRock's Bitcoin ETF outperformed its gold counterpart, marking a shift in institutional preferences.
- Tether entered commodities trading with a $45M oil deal, broadening stablecoin use cases.
- Altcoins and memecoins thrived, driven by speculative buying and market optimism.
- Risks remain from geopolitical tensions and potential volatility tied to Trump's policies.
Week 1: Election Buzz and Market Jitters
The US presidential race dominated global attention, and the crypto market was no exception. Kamala Harris narrowed her gap against Donald Trump, according to Polymarket odds, but betting markets remained firmly in favor of Trump. This uncertainty fueled Bitcoin's volatility, with its options-based measure of expected price swings hitting a three-month high.
Institutional Moves:
- Bitcoin ETFs Shine: Bitcoin spot ETFs saw a whopping $2.22 billion inflows, marking history's third-largest weekly net inflow. BlackRock's ETF led the pack with $2.15 billion, underscoring its dominance in institutional adoption.
- Tokenization on the Rise: UBS launched its first tokenized investment fund on Ethereum, joining the likes of BlackRock and Franklin Templeton in exploring blockchain technology for real-world assets.
- Stripe Leads Web3 Integration: Two weeks ago, Stripe acquired Bridge, a stablecoin payment platform, for $1.1 billion. This week, Bridge acquired Triangle, a web3 wallet-as-a-service provider, showcasing fintech's increasing embrace of blockchain technology.
Altcoin & Memecoin Buzz
Altcoins like SAND, JUP, and AAVE saw increased interest as traders positioned themselves for potential rallies. Memecoins such as DOGE, PEPE, and MOCHI remained hot commodities, with growing demand reflecting speculative enthusiasm among traders.
Market Technicals
Bitcoin traded within striking distance of its all-time high (ATH), climbing to $72,000 before encountering resistance. Geopolitical concerns, like tensions in the Israel-Iran conflict, and macroeconomic factors, including the Federal Reserve's stance on interest rates, kept broader markets cautious.
Week 2: Trump's Win Ignites a Crypto Surge
Donald Trump's confirmed victory in the US presidential election catalyzed a market-wide rally. Bitcoin smashed through its previous ATH of $73,000, peaking at $77,000. Analysts attributed the rapid price surge to optimism about Trump's pro-business policies, including expected deregulation in the crypto space.
Institutional & Corporate Developments
- BlackRock Bitcoin ETF Triumphs: BlackRock's Bitcoin ETF surpassed its gold ETF in assets under management, signaling a shift in institutional preferences from traditional safe havens to digital assets.
- Tether Ventures into Commodities: Stablecoin giant Tether made its first foray into commodities trading, executing a $45 million oil trade. This move highlights the growing versatility and utility of stablecoins in global commerce.
- Dune's Expansion: Blockchain analytics platform Dune acquired smlXL, a data firm backed by Andreessen Horowitz, to enhance its real-time blockchain data offerings.
Altcoins and Memecoins Thrive
With Bitcoin dominance easing slightly, speculative buying in altcoins surged. POL saw notable buying activity, while traders locked in profits on BNB, MPL, and SUI. Memecoins continued to attract diverse strategies, cementing their place as a dynamic segment of the crypto market.
Macro & Broader Market Impacts
The political shift brought by Trump's win has broad implications for crypto. The potential firing of SEC Chairman Gary Gensler and the appointment of crypto-friendly regulators could usher in a more favorable environment for digital assets.
A significant development to watch is the proposed Strategic Bitcoin Reserve. A US Treasury plan to acquire one million BTC over five years could lead to a historic market surge. This policy, aimed at hedging against USD debasement, would represent 5% of Bitcoin's total supply and could inspire similar moves by other nations.
Geopolitical Risks Loom
While markets are riding high, risks persist. The Israel-Iran conflict remains a significant concern, with threats of escalation that could destabilize global markets. Trump's unpredictable policies and potential unscripted statements may also inject market volatility.
Technical Overview
- Bitcoin (BTC): Surged past $73,000 to new ATHs, with analysts eyeing $77,000 as the next key level.
- Ethereum (ETH): Gained strength against BTC, benefiting from renewed risk-on sentiment.
- Gold vs. Bitcoin: Bitcoin's market cap is closing the gap with gold, now sitting at $1.6T versus gold's $17T.
Derivatives Activity
- BTC's annualized basis rate spiked to 16.8%, while ETH's hit 14.8%, reflecting bullish sentiment.
- Skew remains heavily biased toward calls, indicating traders are positioning for further upside.
Looking Ahead
The crypto market is pivotal, shaped by political developments, institutional growth, and macroeconomic shifts. Bitcoin and altcoins are poised for significant moves, but traders should remain cautious given the unpredictable nature of geopolitical risks and market volatility.
With the US transitioning into a new administration and global dynamics evolving rapidly, the next few months promise to be as thrilling as they are uncertain. Stay informed!
