Markets
How is the “Trump Trade” impacting cryptocurrency markets?
Cryptocurrencies have always been a wild ride, but when politics gets involved, things get even more interesting and unpredictable. As the 2024 US presidential election approaches, the role of politics in shaping cryptocurrency markets and trading behavior has become a hot topic, and the influence of political figures and events in this regard is equally undeniable.
As one well-known crypto media platform suggested, political leaders who support crypto innovation could attract younger, tech-savvy voters. On the other hand, those who support strict regulations could attract voters who are concerned about security and fraud. How these candidates approach cryptocurrencies could influence voters’ opinions and, in turn, impact the market.
What do the numbers say?
The growing importance of cryptocurrency in US politics is evident as presidential candidates are now accepting cryptocurrency donations. Harris Poll since November 2023 has shown that 47% of American voters think cryptocurrencies will be part of their investment portfolio in some way. This, along with the approval of Bitcoin and Ether exchange-traded funds (ETFs), prove that the future for cryptocurrencies looks bright.
Source: Cointelegraph
Interestingly, another sponsored by Grayscale Harris Poll Insights in April found that “nearly half” of voters “do not trust political candidates who would interfere with cryptocurrencies.” The report also found that 3 in 10 people are more likely to support a pro-cryptocurrency politician.
Source: Harris Poll Insights 2024
Historical context
Looking back at 2017, President Trump’s signing of the Tax Cuts and Jobs Act had a significant impact ripple effects on the stock market and the cryptocurrency market. The act has substantially increased BitcoinThe value of the cryptocurrency reached nearly $20,000 in December 2017.
However, in 2018, the Trump administration’s crackdown on crypto scams and fraudulent ICOs caused Bitcointhe price of ‘sa to fall. This shows how events and political statements can affect the market in a positive or negative way.
The impact of politics on cryptocurrencies is not limited to the United States. Global political events and figures also impact the market. For example, regulatory decisions in China have historically caused significant market movements. In 2021, China’s crackdown on Bitcoin mining activity has led to a massive decline Bitcointhe price of .
On the contrary, El Salvador’s announcement of Bitcoin as legal tender has had a positive impact on the market. According to the data, the closing price for Bitcoin in June of that year it was around $35,127.08 and in September the BTC price closed at $43,858.37, once again reflecting the market’s sensitivity to political decisions.
The “Trump Trade” and Cryptocurrencies
Former President Donald Trump, who once called Bitcoin a “scam” and insisted that it “competes with the dollar,” which he wanted to remain “the world’s currency,” recently expressed strong support for the sector.
His promises to support the United States cryptocurrency miners AND reduce regulations have earned him industry support and funding, such as the $1 million in Ethereal (ETH) from former Kraken CEO Jesse Powellanother $2 million in Bitcoin (BTC) from Winklevoss Twinsand counting.
I just donated $1 million Bitcoin (15.47 BTC) to @realDonaldTrump and will vote for him in November. Here’s why:
In recent years, the Biden administration has openly declared war on cryptocurrencies. It has weaponized multiple government agencies to intimidate, harass, and… photo.twitter.com/qOQSpmanBR
— Tyler Winklevoss (@tyler) June 20, 2024
This shift in position, often referred to as the “Trump Trade,” has made Bitcoin a key issue in the 2024 elections.
The Trump Trade refers to the simultaneous surge in U.S. stocks, Treasury yields, and the dollar that followed Donald Trump’s victory in the 2016 presidential election. Bernstein analysts suggest that cryptocurrencies could emerge as the top Trump Trade during the current election cycle, with Republican prospects improving and the party’s standard-bearer increasingly embracing a pro-crypto viewpoint.
This shift in political stance towards cryptocurrencies is not just a strategy to finance election campaigns, but also a reflection of the growing importance and acceptance of digital assets in the political arena.
The Demographics of Cryptocurrency Voters
Furthermore, the demographics of crypto voters are a diverse group, not only in terms of political allegiances, but also in terms of social and psychological characteristics. Experts are divided on how the 2024 election will affect the cryptocurrency market. Some believe the market could rise if a pro-crypto candidate wins the election. Others fear that too much freedom could lead to scams and instability.
A study published in the journals PLOS ONE in 2022 found that 30% of American adults have owned some form of cryptocurrency. These people have a range of beliefs and political identities. The study also found that the cryptocurrency market could change significantly as the election approaches.
Source: PLOS ONE report
How Cryptocurrency Policy Could Impact Elections
Cryptocurrency policy is playing a bigger role than ever in the 2024 presidential election. This is the first election in which major candidates are prominently discussing cryptocurrency. For example, as noted above, Trump is now accepting cryptocurrency donations for his campaign and has given crypto industry advocates like the CEO of Messari Ryan Selkis a platform to speak out about their beliefs. This is the beginning of their effort to attract the anti-central bank digital currency (CBDC) and pro-crypto vote.
On the other hand, the Biden campaign says it is talking to cryptocurrency companies to seek guidance on a good “cryptocurrency community and policy to follow going forward,” after Biden in May vetoed the SEC’s Staff Accounting Bulletin 121 (SAB 121), which would allow financial institutions to host cryptocurrencies, arguing that the act would “jeopardize the well-being of consumers and investors.”
Clearly, Trump’s pro-crypto stance has put pressure on the President Joe Biden to soften his previous hawkish stance. However, many believe Biden is staunchly opposed to the cryptocurrency industry.
If Trump wins the election, we could see a surge in cryptocurrency investment. If the election tilts more toward the Republicans, cryptocurrencies could become the main Trump Trade, and hopes for a better regulatory environment could change the narrative around blockchain.
Perhaps in a continued effort by the Trump camp to secure the crypto vote, Decrypt Media recently reported that Trump will again speak to the historic Bitcoin Conference in Nashville in less than two weeks, despite having escaped an assassination attempt by The Weeknd.
The marriage of politics and cryptocurrency is a fascinating and complex topic. The influence of political figures and events on cryptocurrency markets and trading behavior is undeniable. And as Coinbase CEO Brian Armstrong He said last year: “Being anti-crypto is a bad political strategy for 2024.” And here we are.
Author: Ayanfe Fakunle
The #DisruptionBanking editorial team has taken every precaution to ensure that no person or organization has been negatively influenced or offered any type of financial advice in this article. This article is absolutely not financial advice.
Bitcoin AND Etherealalong with the rest of the top 10 cryptocurrencies by market cap, appear to be in hibernation on Thursday morning.
At the time of writing, the Bitcoin Price is still below $65,000 and 2.2% lower than it was this time yesterday, according to CoinGecko data. Things are worse for the Ethereum Pricewhich is 3.7% lower than 24 hours ago at $3,185.22. The drop in ETH’s price is identical to that of Lido Staked Ethereum (stETH), a liquid staking token for Ethereum.
In recent days, falling prices have led to the liquidation of derivative contracts worth $225 million, according to Coin glassAnd about half of that, about $100 million, was liquidated in the last 12 hours.
When a trader is liquidated, it means that their position in the market has been forcibly closed by an exchange or brokerage due to a margin call or insufficient collateral. Margin is especially important when it comes to leveraged positions, which allow traders to control a multiple of their deposit, such as opening a $10,000 position with only $1,000 in their account.
Now that Bitcoin has been in the red for three days in a row, there is a chance that the world’s oldest and largest cryptocurrency could sink even further, BRN analyst Valentin Fournier said in a note shared with Decrypt.
“Bitcoin has closed in the red for three days in a row, with one-way trading showing limited resistance from bulls. Ethereum had a slightly positive Monday with strong resistance from bears who have won the last two days,” he wrote. “This momentum could take BTC to the $62,500 resistance or even the $58,000 territories.”
Looking ahead, Fournier said BRN’s strategy will be to “reduce exposure to Bitcoin and Ethereum and find a better entry point after the dip.”
This is despite Federal Reserve Chairman Jerome Powell’s comments yesterday on interest rates being widely regarded as accommodating and indicative of FOMC rate cuts in September.
Singapore-based cryptocurrency trading firm QCP Capital said the rally in stocks, which sent the S&P 500 up 1.6% from Wednesday’s close, was not felt in cryptocurrency markets.
“Cryptocurrencies have seen a broad sell-off overnight and into this morning,” the firm wrote in a trading note. “The market remains poised as traders pay close attention to daily ETH ETF outflows and further supply pressure from Mt Gox and the US government.”
Meanwhile, the other top-ranking coins are showing mixed performance.
Solana (SOL) is down 7.2% since yesterday to $169.13. Things are even worse for its most popular meme coins. In the past 24 hours, the most popular meme coins Dogwifhat (WIF) are down 12% and BONK (BONK) is down 9%, according to CoinGecko data.
Their dog-themed competitor, Ethereum OG Dogecoin (DOGE), the only meme coin in Coingecko’s top 10, is down nearly 4% since yesterday and is currently trading at $0.1205.
XRP (XRP) dropped to $0.608, which is 7% lower than it was at this time yesterday.
Binance’s BNB Coin (BNB) has kept pace with BTC and is currently trading at $571, down 2.4% from yesterday. Toncoin (TON), the native token of The Open Network, is down just 0.4% over the past day.
This leaves the stablecoins USDC (USDC) and Tether (USDT), both of which are stable as they maintain their 1:1 ratio with the US dollar.
The Securities and Exchange Commission (SEC) will hold another closed-door meeting with Ripple on Thursday, as the market hopes for a possible resolution to the legal battle between the two entities.
However, the cryptocurrency market remains relatively bearish, with the price and trading volume of XRP down in the last 24 hours.
Ripple holders take no risk
At press time, XRP is trading at $0.60. The altcoin’s price has dropped 6% over the past 24 hours. During that time, trading volume was $27 million, down 27%.
The SEC met before with the digital payment company on July 25. While the outcome of that meeting remains unknown, the Sunshine Act Notice for Thursday’s meeting includes one additional topic of discussion from the July 25 closed meeting: the instituting and resolving injunctive relief. That has market participants speculating whether a settlement is imminent.
In an exclusive interview with BeinCrypto, Ryan Lee, Lead Analyst at Bitget Research, noted that:
“This meeting will discuss possible resolution options for the Ripple Lawsuit. The founder of Ripple Labs said that a legal settlement could be announced soon. If an official settlement plan is released, it could positively impact XRP’s price movement.”
However, an assessment of XRP’s price movements on a 4-hour chart shows a spike in bearish bias as the market awaits the outcome of this crucial meeting. Its Moving Average Convergence/Divergence (MACD) indicator readings show that its MACD line (blue) has crossed below its signal line (orange).
XRP 4 Hours Analysis. Source: Trading View
Traders use this indicator to gauge price trends, momentum, and potential buying and selling opportunities in the market. When an asset’s MACD is set this way, it is a bearish signal that suggests selling activity is outweighing buying momentum.
Additionally, the altcoin relative strength index (RSI), at 46.08, is currently below its neutral 50 line and in a downtrend. This indicator measures overbought and oversold market conditions for an asset.
To know more: How to Buy XRP and Everything You Need to Know
XRP 4 Hours Analysis. Source: Trading View
At 43.83 at the time of writing, XRP’s RSI suggests a growing preference among the market participants for tokin distribution.
XRP Price Prediction: Derivatives Traders Exit Market
The XRP derivatives market has also seen a decline in trading activity over the past 24 hours. According to Coinglass, derivatives trading volume has plummeted 18% and open interest has dropped 10% during that period.
Open interest refers to the total number of outstanding derivative contracts, such as options or futurethat have not yet been resolved. When it drops, traders close their positions without opening new ones. This is a bearish signal that reflects a lack of confidence in any potential positive price movement.
According to Lee, the outcome of the meeting with the SEC “would have a significant impact on the price movement of the token.” If the outcome is favorable, the price of the token could rise towards $0.75 in August.
To know more: Ripple (XRP) Price Prediction 2024/2025/2030
XRP 4 Hours Analysis. Source: Trading View
On the other hand, if no favorable resolutions are reached, the price could plummet to $0.50.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto strives to provide accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyAND Disclaimers They have been updated.
Bitcoin is now the dominant force in the cryptocurrency market, surpassing 53% of the total cryptocurrency market, a stronger share than it has been in the past three years.
Bitcoin’s market cap now stands at $1.27 trillion, second according to CoinGecko data. In contrast, the total cryptocurrency market cap is $2.43 trillion, with Ethereum occupying 15.9% of the market, worth $389 billion.
Bitcoin’s rise to dominance this year is unusual, as altcoins typically do better than Bitcoin in a bull market. While meme coins made a strong comeback during Bitcoin’s rally to all-time highs earlier this year, the so-called “wealth effect” It has not been appreciated as much by mid-range coins, such as Ethereum and Cardano.
“ETF flows fundamentally alter market dynamics,” he wrote Meltem Demirors, former chief strategy officer at CoinShares, tweeted Wednesday: “BTC gains no longer translate to alts and the longer tail of crypto.”
Bitcoin’s takeover has continued even as the market cap of Tether (USDT) continues to grow, the world’s largest stablecoin and the third-largest cryptocurrency after BTC and ETH. Stablecoins are backed by fiat currencies and are excluded from some measures of Bitcoin dominance due to fundamentally different value models.
The surge continued to pace even after the launch of Ethereum spot ETFs last week, which ironically culminated in a news sell-off event, and net outflows from new investment products since they were launched. This went against the predictions of K33 Search so far, which predicted that ETFs would catalyze ETH’s growth over the next five months.
Despite the poorer performance of the alts, there is reason to believe that they are ready to bounce back very soon.
CryptoQuant CEO Ki Young Ju said Tuesday that whales are “preparing for the next altcoin rally,” as limit buy orders for assets other than BTC and ETH are on the rise.
The executive shared a chart showing how the “cumulative difference between purchase volume and sales volume” has increased in recent months.
“The indicator measures the difference between buy and sell orders over a year,” CryptoQuant told Decrypt. A buy/sell order is a pre-set request to buy or sell a cryptocurrency if it hits a certain price level, which creates resistance and support levels.
“If the trend is up, it means that more people are placing buy orders, showing strong interest in buying,” CryptoQuant said.
By Ryan-Ozawa.
After Monday’s crash, in which BTC fell by several thousand dollars, the scenario has repeated itself once again in the last 12 hours, with the asset falling to a 2-week low of $63,300.
Alt coins followed suit, with most of the market in the red today. SOL and XRP lead the way from the higher cap alts.
BTC Drops To $63.3K
After a violent Thursday last week, when BTC crashed to $63,400, the asset went on the offensive over the weekend and surged above $69,000 on Saturday, as the community prepared for Donald Trump’s appearance at the 2024 Bitcoin Conference in Nashville.
His speech was followed by more volatility before the cryptocurrency settled around $67,500 on Sunday. Monday started off rather optimistically for the bulls as bitcoin hit a 7-week high of $70,000.
However, he failed to maintain his run and conquer that level decisively. On the contrary, he was rejected bad and dropped to $66,400 by the end of Monday. Tuesday and Wednesday were less eventful as BTC remained still around $66,500.
The last 12 hours or so have brought another crash. Bears have pushed the leading digital asset down hard, which has fallen to a 2-week low of $63,300 (on Bitstamp), leaving over $200 million in liquidations.
Despite the current rebound to $64,500, BTC’s market cap has fallen to $1.270 trillion, but its dominance over alts is recovering and has reached 52.6%.
Bitcoin/Price/Chart 01.08.2024. Source: TradingView
The Alts are back in red
Ripple’s native token has been at the forefront of the market challenge in recent days as pumped up to a multi-month high of over $0.66. However, its run was also interrupted and XPR fell by more than 6% in the last day to $0.6.
The other big loser among the larger-cap alternatives is SOL, which has lost 8% of its value and is now struggling to get below $170.
The rest of this altcoin cohort is also in the red, with ETH, DOGE, BNB, AVAX, ADA, SHIB, and LINK all seeing drops between 2 and 5%.
The total cryptocurrency market cap lost another $70 billion overnight, falling below $2.4 trillion today on CG.
Cryptocurrency Market Overview. Source: QuantifyCrypto SPECIAL OFFER (sponsored)
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