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 also suggest that Bitcoin will experience significant price fluctuations. Additionally, the regulatory benefits brought by Trump and the Republican Party returning to power have injected confidence into the cryptocurrency market.
Lee also pointed out that as the market value of stablecoins continues to reach new highs, there is an increasing 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.
The crypto market welcomes policy benefits, and Trump’s victory may lead to a more favorable regulatory environment.
The news of Trump’s election victory has excited many cryptocurrency industry practitioners.
Brian Armstrong, the CEO of the largest US exchange, Coinbase, stated that with the Republican Party gaining a majority in the Senate, the upcoming Congress will be “the most pro-cryptocurrency Congress in history.”
Many believe that this Congress will push for policies that are more favorable to fintech and blockchain innovation, reducing the regulatory pressure faced by crypto companies. Especially after Trump takes office, it is expected that there will be reforms to regulatory institutions that have previously tried to suppress the crypto industry.
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 interference with the pledge business of 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 in driving up cryptocurrency market prices. Coinbase’s stock price rose 20% on November 11, surpassing $300 for the first time in 2021, making it one of the biggest beneficiaries of the election results.
In addition, Michael Novogratz, the CEO of 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 sees a surge in funds, accelerating price increase.
The influx of funds into Bitcoin exchange-traded funds (ETFs) is also one of the reasons for the recent increase in cryptocurrency market prices.
According to a report by Cointelegraph, BlackRock’s Bitcoin ETF attracted $1 billion in funds on the first trading day after the election, indicating a surge in institutional investors’ demand for Bitcoin.
Ryan Lee, an analyst at Bitget Research, pointed out that the influx of funds through spot ETFs is not only a short-term factor driving up Bitcoin prices but also enhances market liquidity.
Because such ETF investments represent institutional capital’s recognition of Bitcoin, the entry of these investors usually brings stable long-term sources of funds, 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 leads to expectations of greater upward potential in the market.
Binance sees net inflows of over $5 billion.
As the cryptocurrency market enters a bull market, with increasing attention and influx of users and funds, Bitcoin has risen nearly 20% and Ethereum has surged by 30% since November 5.
The world’s largest cryptocurrency exchange, Binance, has recorded net inflows of $1 billion for two consecutive weeks. According to data from DeFiLlama, Binance’s net inflows in November have exceeded $5 billion, more than five times the net inflows of the second-largest platform.
After the announcement of the US presidential election results, the attention of investors on the cryptocurrency market gradually increased, and Binance recorded over 13 million app visits on November 6.
Changpeng Zhao, the CEO of Binance, stated, “During major political events such as the US presidential election, discussions surrounding cryptocurrencies have increased, indicating that cryptocurrencies are playing an increasingly important role in shaping the future of finance and policies. We are indeed witnessing the golden age of cryptocurrencies, and their potential is being embraced and realized globally.”
Driven by this trend, Binance’s user assets have reached $130 billion. According to data from DeFiLlama, this is the highest user asset holding since Binance introduced Proof of Reserves two years ago.
References:
Cointelegraph, Cointelegraph, Cointelegraph.