What happened?
Bitcoin has broken 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 investor sentiment and the volatility in the futures and derivatives markets suggests that Bitcoin will experience significant price fluctuations. Additionally, the return of Trump and the Republican Party to power has injected confidence into the crypto market due to the favorable regulatory environment they are expected to bring.
Lee also pointed out that the increasing market capitalization 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.
The cryptocurrency market welcomes policy benefits, as Trump’s victory may lead to a more friendly 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 winning a majority in the Senate, the upcoming Congress will be the “most supportive of cryptocurrency in history.”
Many believe that this Congress will promote policies that are favorable to fintech and blockchain innovation, reducing the regulatory pressure faced by cryptocurrency companies. Especially after Trump takes office, it is expected that reforms will be made to regulatory institutions that have previously attempted to suppress the cryptocurrency industry.
Michael Miller, an analyst at Morningstar, an independent investment research firm, pointed out that the Trump administration is likely to reduce regulatory pressure on the cryptocurrency industry, particularly interference with the pledge business of cryptocurrency exchanges like Coinbase.
In other words, if there is indeed a policy change in the future, it will not only benefit Coinbase’s business growth but also be considered an important factor in driving up 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.
Furthermore, Michael Novogratz, the CEO of another cryptocurrency company, Galaxy Digital, stated that the day of Trump’s victory became the company’s highest trading volume day of the year, indicating strong demand in the cryptocurrency market after the new government takes office.
Bitcoin ETF attracts significant capital inflows, accelerating price increase.
The influx of funds into Bitcoin exchange-traded funds (ETFs) is also one of the reasons for the recent price increase in the cryptocurrency market.
According to the report from the foreign media 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 from spot ETFs not only contributes to the short-term increase in Bitcoin prices but also enhances market liquidity.
Because such ETF investments represent institutional capital recognition of Bitcoin, the entry of these investors usually brings stable long-term funding, 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 even greater room for growth in the market.
Binance’s net capital inflows have exceeded $5 billion.
With the cryptocurrency market entering a bull market, the number of users and funds flowing into the market has been increasing. Since November 5th, the price of Bitcoin has risen by nearly 20%, and the price of Ethereum has soared by 30%.
Binance, the world’s largest cryptocurrency exchange, has recorded $1 billion in net capital inflows for two consecutive weeks. According to data from DeFiLlama, Binance’s net capital inflows in November have exceeded $5 billion, which is five times more than the second-largest platform in terms of net capital inflows.
After the announcement of the US presidential election results, investors’ interest in the cryptocurrency market has gradually increased. On November 6th, Binance recorded over 13 million visits in a single day.
Changpeng Zhao, the CEO of Binance, stated that “during major political events such as the US presidential election, discussions surrounding cryptocurrencies have been 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.”
Under this trend, the total user assets on Binance have reached $130 billion. According to data from DeFiLlama, this is the highest user asset holding level since the introduction of Binance’s proof-of-reserves two years ago.
References:
Cointelegraph, Cointelegraph, Cointelegraph