Analysts from H.C. Wainwright are attributing a recent market uptick in the crypto sector to growing confidence in Republican presidential candidate Donald Trump’s election prospects. This surge is linked to Trump’s pro-crypto stance, particularly his support for Bitcoin (BTC) mining in the U.S.
Market Reaction to Trump’s Increased Odds
Following a failed assassination attempt on Trump during a campaign rally in Butler, Pennsylvania, on Saturday, July 13, Bitcoin and BTC mining stocks experienced a notable surge. BTC rallied over 9% since the incident, reaching a high of approximately $63,790 on Monday. Concurrently, mining stocks gained around 10% in Monday’s session.
Mike Colonnese, CFA, noted, “Many believe the tragic event immediately boosted Trump’s odds of winning the election in November. Given Trump is widely viewed as the pro-crypto candidate, who has come out and publicly supported Bitcoin mining in the U.S., the markets rallied following the failed attempt.”
End of Selling Pressure
This price boost also coincides with the alleviation of selling pressure from the German government, which recently liquidated its remaining 50,000 BTC seized from the Movie2k case. This liquidation removed an overhang on BTC prices. Additionally, U.S. spot BTC ETFs saw over $1 billion in net inflows last week, acquiring over 18,000 BTC.
On-chain selling pressure has been significant due to the commencement of long-awaited Mt. Gox repayments. In 2010, Mt. Gox became the world’s largest Bitcoin exchange but faced a major setback in 2014 when it halted trading, filed for bankruptcy, and disclosed the loss of approximately 850,000 BTC due to thefts. Recently, the movement of 47,228 BTC from a Mt. Gox-associated cold wallet has triggered market reactions. Miners’ selling pressure also continues to affect prices following a recent halving that reduced mining rewards by 50%.
Increased Hash Rate
In the week ending July 7, BTC rallied 8.7% to $61,015, outperforming broader equity indices. The network hash rate increased by 2.7% to 598 EH/s, while network difficulty remained at 79.5T following a 5% adjustment on July 4.
Higher BTC prices have compensated for lower transaction fees, raising hash prices by 5.2% to $0.049/TH/day, regaining the $0.05/TH/day mark for the first time in three weeks.
Outlook
As the crypto market continues to react to these developments, analysts are closely monitoring the potential impacts of Trump’s pro-crypto stance on Bitcoin and related stocks. The convergence of political events and market dynamics underscores the complex interplay influencing the crypto sector’s performance.
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