Has the Trump-effect on Bitcoin already worn out?
Last Updated on 13 December 2024 by CryptoTips.eu
Anyone who has been following Bitcoin and crypto for a while agrees that there were two factors that provided a strong boost to the Bitcoin price this year (compared to the beginning of the year, the Bitcoin has risen by 140%).
In January we first saw a brief sell-the-news move following the approval of the Bitcoin ETFs, and then a nice bullrun in February and March, leading to a new All Time High of $74,000.
During the months of April to October we mainly experienced lateral movement.
In November and early December we received a new boost because of Donald Trump’s election victory, which led to yet another All Time High of some $103,000.
So… now that that boost is over, we’re back to 6 months of lateral movement? In other words, has the Trump effect already worn off?
Two-fold
As always, the answer is two-fold. In the short term, the Trump effect appears to have played out. That is because investors initially did not expect a US government that was positive about crypto. That does seem to be happening and therefore Bitcoin rose spectacularly in November. That is now included in the price.
A further boost is possible from an extensive interest rate cut by the Federal Reserve later this month. However, as there appear to be quite a few sellers in the $100k to $105k zone, Bitcoin seems unable to move higher without a really strong boost.
In the longer term the price could go higher, because we do not yet know what rules the new Trump team will introduce for crypto. In particular, the appointments of David Sacks, a former PayPal executive, as the country’s first ‘crypto czar’, and the nomination of Paul Atkins, a Wall Street veteran, as chairman of the US stock market watchdog SEC are positive signals that the future could be very good for Bitcoin in the United States.
For now, I guess we’ll have to wait a bit.