Bitcoin Surges to $89,000, Trump Victory Sparks Crypto Market Rally? Can Altcoins Ride the Wave?

Bitcoin Surges to $89,000, Trump Victory Sparks Crypto Market Rally? Can Altcoins Ride the Wave?Bitcoin has been on a tear lately, reaching a new all-time high of $89,253 on November 12th, just a week after hitting $75,400 on US Election Day. As the price soars, Bitcoin is attracting massive capital inflows, with the iShares Bitcoin Trust (IBIT) managed by BlackRock now exceeding the size of one of the largest gold ETFs - iShares IAU

Bitcoin Surges to $89,000, Trump Victory Sparks Crypto Market Rally? Can Altcoins Ride the Wave?

Bitcoin has been on a tear lately, reaching a new all-time high of $89,253 on November 12th, just a week after hitting $75,400 on US Election Day. As the price soars, Bitcoin is attracting massive capital inflows, with the iShares Bitcoin Trust (IBIT) managed by BlackRock now exceeding the size of one of the largest gold ETFs - iShares IAU.

Multiple analysts attribute Bitcoin's recent surge to Trump's victory. Trump's win is seen as ushering in a more favorable regulatory environment for the crypto industry. In the US, the Securities and Exchange Commission (SEC) has been a strict regulator of cryptocurrencies. As the highest regulatory body overseeing the US securities market, the SEC plays a crucial role in regulating security issuance, trading, and various financial institutions. SEC Chair Gary Gensler has repeatedly expressed his stance on Bitcoin. On September 26th, in an interview, Gensler stated directly: "On Bitcoin, both my predecessor and I have said it's not a security." He emphasized the importance of building trust and protecting investors.

Unlike Gensler's attitude, Trump, who recently won the election, has voiced support for Bitcoin on multiple occasions this year. At the Bitcoin conference in Nashville earlier this year, Trump clearly expressed his stance on the SEC chair who emphasizes strict regulation: "On my first day in office, I will remove Gary Gensler and appoint a new SEC Chair."

Jeffrey Ding, Chief Analyst at HashKeyGroup, said that while it remains unclear who will be the next SEC chair, regardless of the appointment, regulatory oversight will loosen. Notably, the passage and implementation of the FIT21 bill could open new doors for the crypto market.

Beyond the political push, Bitcoin's imminent climb to $90,000 this week has also been fueled by MicroStrategy's massive Bitcoin purchases. On November 11th, MicroStrategy announced the acquisition of approximately 27,200 bitcoins for around $2.03 billion between October 31st and November 10th. Following this purchase, MicroStrategy's Bitcoin holdings now have a market value of approximately $24 billion.

Looking ahead, an increasing number of analysts believe that Bitcoin will reach $100,000 before the year's end. Bitcoin Analyst Tone Vays predicts that Bitcoin's potential price range between mid-2023 and mid-2025 will be $102,000 to $140,000, supported by strong technical indicators. Jeffrey Ding points out that Bitcoin has ample time to find new price levels in the future. The promise of "Bitcoin becoming a US reserve asset" could come to fruition. This positive factor, once implemented, would prevent existing cryptocurrency in the US from being sold into the market, significantly reducing potential downside risks as perceived by the market. With Bitcoin becoming a US reserve asset, there might be government procurement. Once this happens, it would unlock new upward potential for the market.

Every Bitcoin price fluctuation triggers wild swings in altcoins. How will Bitcoin's imminent breakthrough of a key price level impact altcoin market sentiment? Arthur Hayes, co-founder of BitMEX, highlighted the rotation effect in the crypto space on the Unchained podcast on November 1st - while liquidity might flow into Bitcoin after the election, other coins would see larger percentage gains if Bitcoin rises.

Zhao Wei, Senior Researcher at OKX Research Institute, told Jiemian News that unlike Bitcoin, altcoins generally lack underlying value, making them more volatile and risky to trade. In the short term, altcoins might experience an upsurge due to massive capital inflows, but it's crucial to assess whether they have sustainable value support after the market sentiment-driven gains and whether they face the potential risk of a sharper correction. When trading altcoins, traders should pay close attention to shifts in market sentiment and implement hedging, profit-taking, and stop-loss strategies for risk management.

Bitfinex analysts also expressed caution: "As Bitcoin absorbs most inflows into the cryptocurrency space, it's highly unlikely that altcoins will see any meaningful recovery in the near term without new catalysts."

In conclusion, Bitcoin's price is continuing to surge, driven by Trump's victory and large-scale purchases by institutions like MicroStrategy, and could potentially become a US reserve asset in the future. However, this does not guarantee a skyrocketing altcoin market. Altcoins lack underlying value, exhibit high volatility, and carry significant trading risks, necessitating a cautious approach from investors.