CryptoWorld News Report:
Late Tuesday into early Wednesday, the “Trump Trade” took center stage as Bitcoin reached an all-time high and cryptocurrency prices surged, fueled by early signs that the Republican Party might return to the White House.
The rise in Bitcoin was attributed to the market starting to price in the possibility of former President Donald Trump winning on election day, with key swing states completing their voting sooner than many had predicted.
According to TradingView’s crypto index, Wednesday saw Bitcoin post its largest single-day performance since March 20, rising 9% to close above $75,560.
Some suggest that despite the market’s keen anticipation for next week’s rally, the Federal Reserve’s Open Market Committee’s decision on Friday to lower or maintain the fund rate is unlikely to boost prices.
David Lawant, Head of Research at FalconX, stated, “This decision is irrelevant.”
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“But as we head into 2025 under a Trump presidency, there is significant macroeconomic uncertainty.”
Instead, Lawant pointed to the uncertainty surrounding Trump’s proposed tariffs and their impact on cryptocurrencies, as well as potential fiscal and monetary policy decisions the former president might make in a second term.
However, not everyone agrees with Lawant’s perspective.
Pav Hundal, Chief Market Analyst at cryptocurrency exchange Swyftx, stated,
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“The Fed’s decision is likely to be hotter for Bitcoin than the U.S. election results.”
Lower rates reduce borrowing costs, increase consumer spending, and diminish the appeal of traditionally safer investments like bonds, prompting investors to turn to riskier assets for higher returns.
Hundal stated, “The market has already ventured back into Bitcoin.” “A 25 basis point or more substantial rate cut will only accelerate this process, making the likelihood of Bitcoin reaching six figures by year-end more plausible.”
As investors seek better growth opportunities in a low-interest-rate environment, changes in rates often boost demand and valuations for stocks and cryptocurrencies.
Hundal added, “The current FOMO in the market is layered upon previous FOMO.” “We observed a clear accumulation trend immediately after the last rate cut, so it’s safe to say a 0.25% rate cut will be very positively received.”
