After a relatively weak period of trading sideways for days and days, bitcoin’s price went on the offensive on Friday evening and Saturday morning and tapped $65,000 for the first time since early August.
Some of the most probable reasons behind this $5,000 daily surge seem to be connected to the US central bank and the upcoming elections in the country.
First, it Was the Fed
Bitcoin’s relationship with the US Federal Reserve’s economic policies has been demonstrated numerous times in the past few years, especially since the monetary entity changed its tune during the COVID-19 crash. The subsequent inflation spike led to an unprecedented hike in interest rates.
The multi-decade peak in the rates resulted in fewer funds getting allocated to risk-on assets like BTC, which prompted numerous experts to expect a price surge once the US Fed decided to pivot from its strategy. In other words, the Fed was anticipated to follow the example set by the ECB, the Bank of England, and the Bank of Canada and lower the key interest rates.
After a few delays, Chair Jerome Powell finally announced on Friday that it was time for such actions. During his speech at the annual 2024 Jackson Hole Economic Symposium, he didn’t provide an exact date when the rates will be cut, but the general expectations are that it will be in September.
Then, it Was RFK
Aside from the Fed’s actions, BTC’s price has been strongly correlated to the current US presidential election cycle. After all, the Democrats, with their current President Joe Biden, have been anything but nice to the crypto industry, led by the SEC’s (unsuccessful) crusade.
On the other hand, the Republican’s candidate – Donald Trump, has changed his stance on the industry and promised all good things to happen to Bitcoin, miners, and everything in between. Yes, he even said he will fire the SEC’s Chair, Gary Gensler. Oh yes, on his first day in office.
Biden’s withdrawal from the 2024 race and the subsequent replacement by current VP Kamala Harris changed the narrative for this year’s elections. However, more promising news for Trump, and apparently for the crypto industry, came last night as well.
This time, Robert F. Kennedy, who was the most vocal Bitcoin supporter among all candidates, suspended his independent campaign and endorsed Trump. This was regarded as a positive development for Trump and, hence, the crypto market.
The surge from $60,000 to $65,000 in 24 hours could possibly attributed to both of the aforementioned reasons. As such, it would be interesting to follow the upcoming elections, the Fed’s policy change, and the impact on the crypto market.