Bitcoin traders eye Trump victory as potential market boost – FT

Former President Donald Trump’s potential return to the White House is expected to trigger a significant increase in Bitcoin’s value, the Financial Times reported on July 5, citing several analysts.

According to the FT, the concept of a “Trump trade” is gaining popularity among crypto traders due to the former president’s “perceived pro-crypto stance and policies.”

The flagship crypto’s recent performance has been hampered by miner sales and regulatory moves by US and German authorities. Expected refunds from the Mount Gox bankruptcy case have also contributed to market volatility, sending Bitcoin below $54,000 for the first time in months.

However, analysts remain optimistic that a Trump victory could lead to a significant rally for Bitcoin, potentially breaking a new record in August and reaching $100,000 on Election Day.

At the time of writing, Bitcoin had recovered somewhat and was trading just above $56,000 CryptoSlate facts.

Trump: the Bitcoin lawyer

According to the report, industry leaders are hopeful that a Trump administration, coupled with a strong Republican presence in Congress, will foster a more favorable regulatory environment for cryptocurrencies.

Donald Trump has recently emerged as a notable supporter of the crypto industry. He recently hosted crypto mining executives at his Mar-a-Lago estate and began accepting campaign contributions in digital assets. The former president has made several positive statements about crypto in recent weeks, including rumors that he is considering adopting Bitcoin as the country’s reserve asset.

Market analysts suggest that Trump’s pro-crypto stance could significantly increase Bitcoin’s appeal, potentially driving its price to unprecedented levels. Some market watchers even predict that Bitcoin could reach $100,000 by Election Day if Trump wins, the report said.

A potential Trump presidency also brings broader financial market considerations. Policies expected under Trump, such as tighter immigration controls, higher tariffs and tax cuts, are expected to increase the US budget deficit, boost inflation and raise government bond yields.

Geoff Kendrick, head of digital assets research at Standard Chartered, stressed that Trump’s policies could lead to “fiscal dominance,” with significant government deficits and debt undermining the Fed’s ability to control inflation.

Kendrick believes such a scenario could benefit Bitcoin’s price, given its correlation with major US government bonds. He added that a steeper curve and higher breakeven interest rates than real rates would likely push bitcoin prices higher, positioning it as a hedge against declining confidence in the U.S. Treasury market.

Uncertain political landscape

According to the FT, if it becomes clear at the end of July that President Joe Biden will run for re-election, the chances of a Trump victory will increase, potentially allowing Bitcoin to soar to new heights.

However, the report added that the “Trump trade” largely depends on Biden being Trump’s opponent in November. According to the RealClearPolitics Betting Average, Trump currently has a 55% chance of winning, while Biden is at 16.5%.

This indicates that Bitcoin enthusiasts are likely to be optimistic as long as Biden remains in the race. On the other hand, if Biden withdraws and a new candidate emerges who is considered to have a competitive advantage over Trump, Bitcoin’s momentum could falter.

Betting markets, such as Polymarket, have seen substantial bets on Biden withdrawing from the race, with more than $11 million placed on this outcome.

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