US Election Fuels Rally in Crypto Markets, Bitcoin Breaks $66,000

US Election Fuels Rally in Crypto Markets, Bitcoin Breaks $66,000On Monday, the cryptocurrency market surged, with Bitcoin and Ethereum gaining 6% and 6.8%, respectively, reaching new highs for the period

US Election Fuels Rally in Crypto Markets, Bitcoin Breaks $66,000

On Monday, the cryptocurrency market surged, with Bitcoin and Ethereum gaining 6% and 6.8%, respectively, reaching new highs for the period. Bitcoin broke through the $66,000 mark, reaching its highest point in two weeks, while Ethereum approached its September 27th peak of $2,728 and its August 3rd peak of $3,019. Other top ten cryptocurrencies also surged, painting a picture of optimism across the market.

Harris' Commitment to a Crypto Regulatory Framework Boosts Market Confidence

The primary driver of this crypto market rally stems from the US election. US presidential candidate and current Vice President Kamala Harris promised support for a regulatory framework for digital currencies, injecting a dose of confidence into the crypto markets. Harris' statement had a positive impact during Asian trading hours, visibly enhancing market sentiment. A press release stated that Harris recognizes that over 20% of African Americans own or have owned cryptocurrency assets, and her plan will ensure that all owners and investors of digital assets benefit from a regulatory framework, protecting African-American men and other groups participating in this market.

For years, those involved with the digital currency sector have lamented the US government's approach to regulation through enforcement rather than providing clear legislation. Harris' recent commitment can be seen as a response to the crypto industry. In late September, Harris publicly spoke in favor of cryptocurrency investments and committed to increasing investment in the artificial intelligence and cryptocurrency industries if elected.

Trump Actively Courting Crypto Voters, Driving Market Volatility

On the other hand, US presidential candidate and former President Donald Trump is also actively courting crypto voters in the 2024 presidential race, outlining various plans related to digital currencies. Analysts believe that the initial surge in cryptocurrencies was driven by Trump's lead in prediction markets and polls, followed by a strengthening of market confidence from semi-supportive statements from Harris campaign team regarding the crypto market.

While specific details about Harris' crypto policy have yet to be revealed, her stance appears less negative than the Biden administrations. Over the past few days, market predictions about the US election have reversed, with Trump currently projected to have a higher chance of winning than Harris.

Mt. Gox Creditor Repayment Date Postponed, Easing Market Concerns

In addition to political factors, the bankrupt Mt. Gox cryptocurrency exchange last week extended the deadline for creditors to be repaid for remaining assets by a year to October 31st, 2025, alleviating market concerns about an oversupply of digital currencies. Arkham Intelligence estimates the value of these assets to be around $2.9 billion. Delaying the sale of returned Bitcoin by creditors will help prevent a negative impact on the market from an oversupply in the short term.

Crypto-linked ETFs and Concept Stocks Rise Across the Board

On Monday, crypto-related ETFs and concept stocks mostly rose. The 2x leveraged Bitcoin ETF climbed approximately 9%. Bitcoin miner CleanSpark surged over 12%, and fellow miner MARA rose 5.6%. Cryptocurrency exchange Coinbase jumped 11%. MicroStrategy saw a near 16% gain last Friday, climbing further in early Monday trading before turning negative by the closing bell.

October Traditionally a Strong Month for Bitcoin, Historical Data Points to Seasonality

Bitcoin started October with a weak performance but has since reversed this trend. Looking at the past decade, October has historically been a strong month for Bitcoin, with an average gain of 20%. Industry experts point out that historical data shows that the cryptocurrency market's seasonal strength in October typically occurs in the latter half of the month.

Summary

The cryptocurrency market saw a strong rebound on Monday, fueled primarily by the US election and Harris's commitment to supporting a regulatory framework for cryptocurrencies. Market sentiment has noticeably improved, with major cryptocurrencies like Bitcoin and Ethereum surging. Additionally, the postponement of the Mt. Gox creditor repayment date eased market concerns about an oversupply. Further, October is typically a strong month for Bitcoin, leading the market to anticipate continued positive momentum in the crypto market for the next period.