What happened?
Bitcoin has broken through the $85,000 mark, reaching a new all-time high after Donald Trump’s victory in the US presidential election. This has reignited expectations in the market for Bitcoin to surpass $100,000 by the end of the year.
Ryan Lee, an analyst at Bitget Research, stated that the election results have strengthened investors’ bullish sentiment. The open interest contracts in the futures market and the volatility in the derivatives market indicate that Bitcoin is likely to experience significant price fluctuations. Furthermore, the return of Trump and the Republican Party to power has injected confidence into the crypto market due to the expected regulatory benefits.
Lee also pointed out that the increasing market value of stablecoins has led to a higher demand for leveraged funds, further driving up the price of Bitcoin. It is highly likely that Bitcoin will surpass the $100,000 target within the next three months.
Crypto market welcomes policy benefits, Trump’s victory may lead to a more favorable regulatory environment
The news of Trump’s election victory has excited many participants in the cryptocurrency industry.
Brian Armstrong, the CEO of the largest US exchange, Coinbase, stated that the Senate majority gained by the Republican Party means that the upcoming Congress will be the “most crypto-friendly Congress in history.”
Many believe that this Congress will promote policies that are more favorable to fintech and blockchain innovation, reducing the regulatory pressure faced by crypto companies. Particularly after Trump takes office, it is expected that regulatory institutions that have previously attempted to suppress the crypto industry will undergo reforms.
Michael Miller, an analyst at independent investment research firm Morningstar, pointed out that the Trump administration is likely to reduce regulatory pressure on the cryptocurrency industry, especially concerning business operations such as pledging by crypto exchanges like Coinbase.
In other words, if there is indeed a policy change in the future, it will not only benefit the growth of Coinbase’s business but also be considered an important factor driving the increase in cryptocurrency market prices. Coinbase’s stock price rose by 20% on November 11, surpassing $300 for the first time in 2021, making it one of the biggest beneficiaries of the election results.
Additionally, Michael Novogratz, the CEO of another crypto company, Galaxy Digital, stated that the day of Trump’s victory became the company’s highest trading volume day this year, indicating strong demand in the crypto market after the new government takes office.
Bitcoin ETF attracts significant capital inflows, accelerating price surge
The influx of funds into Bitcoin exchange-traded funds (ETFs) is also one of the reasons for the recent price surge in the cryptocurrency market.
According to the media outlet Cointelegraph, BlackRock’s Bitcoin ETF attracted $1 billion in funds on the first trading day after the election, demonstrating the increased demand from institutional investors for Bitcoin.
Ryan Lee, an analyst at Bitget Research, pointed out that the influx of funds from spot ETFs not only serves as a short-term factor driving up Bitcoin prices but also enhances market liquidity.
Because this type of ETF investment represents institutional recognition of Bitcoin, the entry of such investors usually brings stable long-term funding sources, further supporting the upward momentum of Bitcoin prices.
Therefore, the price volatility of Bitcoin may intensify in the short term, but the stable demand brought by ETFs is expected to provide a larger upward potential for the market.
Binance sees net capital inflows of over $5 billion
With the cryptocurrency market entering a bull market, there has been an increasing influx of users and funds into the market. Since November 5, the price of Bitcoin has risen by nearly 20%, and Ethereum has surged by 30%.
Binance, the world’s largest cryptocurrency exchange, has recorded a net capital inflow of $1 billion for two consecutive weeks. According to data from DeFiLlama, Binance’s net capital inflow in November has exceeded $5 billion, more than five times that of the second-largest platform.
After the announcement of the US presidential election results, investors’ attention to the cryptocurrency market has gradually increased, and Binance recorded over 13 million app visits on November 6.
Changpeng Zhao, the CEO of Binance, stated, “During major political events like the US presidential election, discussions surrounding cryptocurrencies are increasing, indicating that cryptocurrencies are playing an increasingly important role in shaping the future of finance and policy. We are indeed witnessing the golden age of cryptocurrencies, and their potential is being embraced and realized globally.”
Driven by this trend, the total assets held by Binance users have reached $130 billion. According to data from DeFiLlama, this is the highest user asset holding since Binance introduced the proof-of-reserves two years ago.
Reference:
cointelegraph, cointelegraph, cointelegraph
