Key Takeaways:
On Monday, Bitcoin (BTC) was trading close to the coveted $70,000 mark, hitting its highest level in six weeks after former US President Donald Trump reiterated his support for the world’s largest cryptocurrency.
Trump Promises Strategic Bitcoin Reserve If Elected In November
Speaking at the Bitcoin 2024 conference in Nashville, Tennessee, on Saturday, the Republican Party nominee for the White House promised that if elected in November, he would establish a “strategic Bitcoin reserve” and prevent the US government from selling its BTC holdings.
The billionaire also said he would fire Gary Gensler, the incumbent chairman of the Securities and Exchange Commission (SEC) on day one, which received a huge cheer and applause from the crowd.
Trump’s position on creating a strategic Bitcoin reserve echoes a proposal by Wyoming Senator Cynthia Lummis, who is set to introduce a bill this week directing the US Treasury to purchase 1 million BTC, worth $65 billion, over the next five years.
In an interview with the crypto publication The Block, Lummis said such legislation would have the Treasury Department self-custody the Bitcoin across a variety of locations around the world, and the government would hold the assets for at least 20 years unless they are sold to reduce the national debt.
For reference, as of July 29th, the debt of the United States has surpassed $35 trillion.
Experts Say Trump Presidency Will Boost Crypto Investor Sentiment
Following Trump’s speech, Justin d’Anethan, the head of APAC business development of crypto market Keyrock, told reporters that the current positive sentiment regarding crypto from many politicians and “economic stakeholders” is bolstering investor sentiment.
He added that Trump and the Republicans are more likely to win this year’s election, leading to a “more accommodative” monetary environment and business-centric administration that will lower taxes and cut rates to support risk assets.
Peter Chung, head of research at Presto, commented that the significance of November’s election on the crypto market has become “more important than ever”.
He noted that short-term speculators of Bitcoin had liquidated their positions in the lead-up to Trump’s speech after the market briefly tanked on a ‘sell-the-news’ move, as evidenced by the large-scale liquidations in the futures market.
However, this resulted in long-term investors swapping positions with short-term Bitcoin holders as they understand the significance of the changes that are taking place in US politics concerning Bitcoin, Chung said.
Meanwhile, Nick Ruck, the head of growth at BitU Protocol, said that crypto traders and investors are waiting on the Federal Reserve’s decision on reducing interest rates and who Trump will appoint to key finance positions if elected.
Bitfinex Analysts Warn of BTC Price Consolidation As $2.2 Billion In Options Expire Next Month
But not everything is going to be smooth sailing for Bitcoin. Analysts at Bitfinex predicted in a note that they expect further downward pressure for BTC as the monthly expiration of around $2.2 billion in options is set to occur on August 2nd.
They are suggesting that the event could cause Bitcoin’s price to stall or even pull back slightly from the newly formed resistance zone between $68,000 and $69,000. Despite the risk of a fallback, analysts say that leveraged long-positions could be more influential to the apex cryptocurrency’s price than spot market activities.
Bitfixes analysts also gave an outlook on the broader macroeconomic environment, which they described as “cautiously optimistic”. They highlighted that the housing market remained a “drag on growth” because of the higher-than-expected median house prices that are affecting sales of existing homes.
Crypto-Related Stocks Rally With Bitcoin
Crypto-related stocks rallied in the pre-market session on Monday as Bitcoin rested the resistance at $70,000. MicroStrategy saw its shares soar to $1,828 – its highest valuation since March 28th.
The stock continues to outperform Bitcoin and the spot BTC exchange-traded funds (ETFs) like BlackRock’s IBIT, Fidelity’s FBTC, and Ark Invest’s ARKB. MicroStrategy shares are up 177% this year while BTC is up by 57%.
MicroStrategy is the world’s largest corporate holder of Bitcoin, with 226,331 tokens, valued at over $13.6 billion. The company’s shares benefit when BTC rallies as they are backed by the cryptocurrency. It managed to add more tokens to its reserves this month using part of the $700 million it raised in July.
Meanwhile, publicly-listed Bitcoin mining firms like Riot Platforms, Marathon Digital, and Core Scientific saw their stocks rise by over 5% in the pre-market session. Coinbase, one of the world’s leading cryptocurrency exchanges, also rose 4%, a positive development ahead of its upcoming earnings.
Historically, July has been a positive month for Bitcoin. Last year, the cryptocurrency began its ascend to an all-time high after the SEC approved proposals for the first batch of spot Bitcoin ETFs. This year, Bitcoin has gained over 15% in the last 30 days and recorded more than $19 billion in year-to-date inflows, a new record.
According to CoinShares, Bitcoin-based investment products received nearly $520 million as capital between July 22 and July 26, pushing BTC inflows past the $3.6 billion marker in 2024.
At the time of writing, Bitcoin (BTC) is trading at $66,926 – down 3.67% over the last 24 hours.
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