- Bitcoin’s price soared 8% in the past week, reaching new highs above US$76,943 following Trump’s electoral victory.
- Global central banks, excluding Australia’s RBA, are reducing interest rates, contributing to Bitcoin’s upward trend.
- Recent statements by Fed Chair Jerome Powell clarify that US elections and presidential pressures have no immediate policy impact.
- Analysts highlight substantial capital inflows into Bitcoin, setting the stage for further price increases.
Bitcoin has rallied an impressive 8% in the past week, going from around US$66k (AU$98.8k) just before the US election to more than US$76k (AU$113.8k) after Trump’s win. It has since broken new all-time highs a few times, setting the new record at US$76,943 (AU$115,276) in the early hours, Australian Time.
Trump Win Has ‘No Effect on Policy’ Says Fed Chair
And BTC could see more upward momentum with several central banks cutting interest rates – though here in Australia the RBA is still holding back. Sweden’s central bank has just cut interest rates by 50 basis points while the Bank of England and the US Federal Reserve cut rates by 25 bps.
While Bitcoin’s high comes following these announcements and has since slightly retreated, there’s hope the Fed may cut rates one more time in 2024.
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Interestingly, Fed Chair Jerome Powell said the election has “no effect” on Fed policy in the short term. Powell also dismissed a reporter’s question on whether he would resign if Trump asked him to do so.
He also made clear that “under law” Trump can’t fire or demote the Fed Chair. That’s of course also the case for the most loathed man in crypto, Gary Gensler. Trump has promised to sack the Securities and Exchange (SEC) Chief on day one, but that’s unlikely as it’s practically very hard to do.
Net Capital Flows Up ‘Significantly’ Say Analysts
And there are other indications that Bitcoin is not done yet. As analysts at Glassnode report, Bitcoin has seen enormous net capital inflows since September. They wrote that this is indicative of growing investor interest in deploying funds and traders capitalising on market momentum.
Additionally, the recent rise in Bitcoin Realised Cap reflects significant investment inflows, reaching a new all-time high.
The Bitcoin Realized Cap has increased by 3.8% over the last 30 days, which is one of the higher inflow levels since January 2023. The Realized Cap is currently trading at an ATH value of $656B, supported by a net 30-day capital inflow of $2.5B.
Glassnode
The analysts believe profit-taking is “suggesting a new wave of demand is entering the market”, which comes after the market has been absorbing profit-taking from the previous high in March.
All this seems to set up Bitcoin to finally breach the US$77k (AU$115.4k) barrier, potentially going much higher in the coming months.
Related: Senator Lummis Confirms Bitcoin Reserve Following Trump Win
JP Morgan analysts, for one, believe that the Trump win will continue to boost BTC at least “over the coming eight weeks or so”, much like the last time he took office eight years ago.
Despite a drop in the gold price and the rise in the price of Bitcoin, they think Trump’s policies will be good for both assets well into 2025.
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