Will a Trump Victory Boost Bitcoin? Crypto Markets Rise Overnight, Analysts Disagree

Will a Trump Victory Boost Bitcoin? Crypto Markets Rise Overnight, Analysts DisagreeThe cryptocurrency market today reversed yesterday's downtrend and rose. As of press time, Bitcoin is up 1

Will a Trump Victory Boost Bitcoin? Crypto Markets Rise Overnight, Analysts Disagree

The cryptocurrency market today reversed yesterday's downtrend and rose. As of press time, Bitcoin is up 1.51% to $67,777 per coin. However, the market hasn't fully shaken off the gloom of yesterday. Yesterday, Bitcoin prices experienced wild swings, dropping over $3,000 at one point, hitting a low of $65,644 per coin, down nearly 4%. Ethereum, Solana, Dogecoin, and others also took a significant dive.

On the news front, the US federal government is investigating cryptocurrency company Tether for possible violations of sanctions and anti-money laundering regulations. The criminal investigation is being overseen by prosecutors from the Manhattan US Attorney's Office, looking into whether the cryptocurrency was used by third parties to fund illegal activities like drug trafficking, terrorism, and hacking, or to launder proceeds from these illegal activities. Meanwhile, the US Treasury Department has been considering imposing sanctions on Tether, saying the Tether cryptocurrency "has been widely used by individuals and entities sanctioned by the US, including Hamas and Russian arms dealers."

However, what is more concerning for market investors is the impact of the recent US presidential election results on cryptocurrencies. Haitong Macro's Liang ZhongHua team pointed out that in the field of virtual currency policy, Trump actively supports the development of Bitcoin and cryptocurrencies. At the Bitcoin 2024 conference, Trump stated that he would maintain the current US government's Bitcoin holdings and make the US the "cryptocurrency capital" and "Bitcoin superpower." He also claimed that the Biden administration's suppression of cryptocurrencies and Bitcoin was wrong.

Harris also encourages the development of cryptocurrencies but places more emphasis on regulation. Harris has emphasized her support for a regulatory framework for cryptocurrencies and other digital assets in order to protect investments and the people who own these assets. Bitcoin has been categorized as a so-called "Trump trade." From June to early October this year, cryptocurrencies, led by Bitcoin, experienced a good rally. But since late October, Bitcoin's rally has cooled off. Over the past seven days, Bitcoin prices have fallen nearly 3%.

As Republican candidate Trump is leading Harris in prediction markets, bond yields and the dollar have recently surged. One view is that investors are reining in bets on easy monetary policy. As the financial environment tightens relatively, Bitcoin and US stocks have also fluctuated, putting the token on track for its first loss in three years.

Bloomberg points out that Trump embraced the digital asset industry during his campaign, boosting sentiment for cryptocurrencies, but the question is whether the impact of his broader priorities will moderate this optimism. Tony Sycamore, market analyst at IGAustraliaPty, said, "Of course, yes, a stock sell-off, a stronger dollar, and rising yields all mean tightening financial conditions. In the extreme, that's not good for crypto. Some will point out that financial conditions were easy to start with, but what matters more is the speed of the tightening."

Caroline Mauron, co-founder of OrbitMarkets, a liquidity provider for digital asset derivatives trading, said that if Trump were to win, it could lead to higher interest rates and ultimately "have a negative impact on risk assets." Nevertheless, "the Trump administration's expected regulatory softening of the crypto industry should still be the more important factor," she said.

It's worth noting that market analysts are divided on the ultimate impact of a Trump victory on the cryptocurrency market. While Trump's policies may lead to higher yields, his more lenient attitude towards the cryptocurrency industry may be the more significant factor. The future direction of the cryptocurrency market remains to be seen.