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Trump's Win Sends Bitcoin to New High: Breaks $90,000 Barrier, What's Next?

Blockchain 2024-11-12 22:08:06 Source:

Trump's Win Sends Bitcoin to New High: Breaks $90,000 Barrier, What's Next?Less than a week after the US election, Bitcoin price has reached a new all-time high. On November 12th, Beijing time, Bitcoin touched $89,982

Trump's Win Sends Bitcoin to New High: Breaks $90,000 Barrier, What's Next?

Less than a week after the US election, Bitcoin price has reached a new all-time high. On November 12th, Beijing time, Bitcoin touched $89,982.93 per coin, reaching close to the $90,000 mark for the first time and setting a new historical high. As of 5:00 PM Beijing time, Bitcoin remained at a high, trading at $89,187 per coin. Hong Kong stock virtual currency ETFs also surged rapidly, with many ETFs like Huaxia Ether ETF seeing gains exceeding 7%.

Industry analysts are generally bullish on Bitcoin, believing that based on factors such as Trump's election as US President and anticipated Fed rate cuts, Bitcoin still has room for further gains.

Behind Bitcoin's surge: Continuous institutional fund inflows and strong demand for spot Bitcoin ETFs.

Recently, Bitcoin price has been rapidly climbing, breaking new highs consecutively. On November 6th, Bitcoin broke through $75,000 per coin. On the 10th, Bitcoin crossed the $80,000 mark for the first time, with a daily gain of 4%. On the 12th, Bitcoin reached around $89,000, just a step away from $90,000. Since November, Bitcoin has risen over 23%.

 Trump

Bitcoin's price surge is inseparable from continuous capital inflows. Bosera International's observation data shows that US spot Bitcoin ETFs have seen net inflows for five consecutive weeks. Last week (November 4th to 8th), the weekly capital inflow reached approximately $1.606 billion. Among them, several Bitcoin ETFs have seen a sharp increase in their size. Taking BlackRock's Bitcoin fund (IBIT), the largest comprehensive financial services group in the world, as an example, FactSet data shows that IBIT attracted approximately $1 billion in capital inflow over the past week. Since its establishment in January, it has attracted a total of $27 billion in inflows. As Bitcoin prices continue to rise, its total assets have surpassed $30 billion, exceeding the size of the companys flagship gold trust fund (IAU).

"Bitcoin breaking $80,000 is mainly driven by continuous institutional demand entering through spot Bitcoin ETFs, not by retail investors," said Cameron Winklevoss, co-founder of Gemini. He believes that sticky demand from institutional investors is a sign of long-term bullish sentiment and signifies that the current market cycle is still in its early stages.

Hong Kong stock virtual currency ETFs are also experiencing a moment of peak gains. As of 12th Hong Kong stock market close, Huaxia Bitcoin ETF gained 10%, Huaxia Ether ETF, Bosera Ether ETF, Southern Ether ETF, and GF Ether ETF all saw gains exceeding 7%. Looking at the longer time frame, Bitcoin-related ETFs have seen gains exceeding 30% in the past 60 days.

Besides Bitcoin, other cryptocurrencies are also rapidly rising. As of press time, Ethereum, the worlds second-largest cryptocurrency, has risen 34% in November to $3,494 per coin. Binance Coin has risen 13% in November to above $650 per coin.

Institutions generally believe that the rise in Bitcoin and other cryptocurrencies may be connected to Trump's election. "Trump maintains an open attitude towards virtual currencies," pointed out Haitong Securities Research in a report. Trump declared at the Bitcoin 2024 Summit in Nashville, US, that if he returns to the White House, he will ensure the government retains 100% of its Bitcoin holdings and will classify Bitcoin as a US strategic reserve asset, ensuring that the US becomes a global cryptocurrency capital and Bitcoin superpower. Moreover, Trump mentioned at the summit that he would fire the current US Securities and Exchange Commission (SEC) Chairman Gary Gensler on his first day in office. It is understood that Gensler has a stricter regulatory policy for the cryptocurrency industry. In recent years, under Gensler's leadership, the SEC has filed multiple lawsuits against industry cryptocurrency giants like Binance and Coinbase.

Is $89,000 the end point? After reaching new highs consecutively, does Bitcoin have further room for growth?

"This election result will have a 'short-term impact on sentiment in the crypto market," predicted Bernstein analysts Gautam Chhugani et al. in their report. They expect that in the scenario of Trump winning the election, Bitcoin could rise to between $80,000 and $90,000 in the next two months, breaking the historical high of nearly $73,800 set in March this year.

Yu Jianing, co-chair of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, believes that future market trends depend on multiple factors. First, whether the market's optimistic sentiment can be maintained after the implementation of Trump's policies and whether the policy implementation can bring substantial support to the industry are key influencing factors. Second, the main driving force behind the short-term surge is the market's anticipation of favorable future policies. If the policy details are not as clear or loose as expected by the market, it may lead to a correction.

A cryptocurrency industry researcher told us, "The market anticipates a high probability of the Fed cutting interest rates in the future." Lower interest rates reduce the cost of capital, stimulating economic activity and investment, making investors more inclined towards high-risk, high-return assets, which is also beneficial for the continued growth of the Bitcoin market.

While Bitcoin's recent performance has been positive, most industry experts and investors interviewed believe that there are still considerable investment risks.

On the one hand, Bitcoin's price fluctuations have been relatively large in the past half a month. At the end of October, Bitcoin rose above $70,000 per coin, but it quickly corrected in early November, falling to $67,000 on November 4th. Bitcoin prices only started to soar after November 5th.

On the other hand, while Bitcoin and other cryptocurrencies are generally on an upward trend, they still face rapid fluctuations in the short term. Coinglass data shows that in the past 24 hours, there have been both bullish and bearish liquidations in the Bitcoin market, with a total of 166,000 people liquidated, with total liquidation losses of nearly $600 million, including $230 million in bullish liquidations and $370 million in bearish liquidations.

The aforementioned industry researcher told us, "The digital asset market is characterized by hot sentiment and is prone to correction risks. It is recommended that investors reduce high-leverage operations during this period and rationally evaluate their risk tolerance."

Tag: Trump Win Sends Bitcoin to New High Breaks Barrier


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