Why Is Bitcoin Price Rising Before 2024 Elections?

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As an analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market fluctuations driven by political events and economic factors. The current surge in Bitcoin price ahead of the 2024 US Presidential Election is a fascinating phenomenon that echoes similar patterns we saw during the 2016 and 2020 elections.

Approximately one fifth of American adults currently own at least one type of cryptocurrency, making it a significant issue in the upcoming 2024 U.S. Presidential Election. As the election nears, just three weeks away, the price of Bitcoin has unexpectedly surged by over 3.8% within the past day. This surge has pushed Bitcoin to become the tenth largest global asset, with a market capitalization of $1.34 trillion according to CoinmarketCap data.

Why is Bitcoin Price Rising With US Elections?

Over the past few days, Bitcoin’s value has shown strong growth, reaching an elevated point of $67.8K – a three-month peak – following a 9.45% increase in value over the week. This significant rise occurs mere weeks before the US elections, sparking numerous theories about a possible connection between the election and Bitcoin’s price. In this year’s election cycle, the crypto industry has garnered substantial attention, fueling excitement around it. Yet, this is not the only factor at play, as Bitcoin’s value has also seen spikes during previous election periods.

Why Is Bitcoin Price Rising Before 2024 Elections?

According to QCP Capital’s findings, a comparable price movement occurred during the 2016 and 2020 U.S. elections. The report indicates that in 2016, Bitcoin remained within a narrow trading range for three months, but started to increase three weeks prior to the election dates. Initially, Bitcoin was worth around $600, but it nearly doubled by the first week of January following the surge.

2020 saw Bitcoin’s price facing challenges for several months, but it started to surge three weeks prior to the election. This surge led to an all-time high of around $52K in January, up from its pre-election value of approximately $11K. Therefore, a similar situation could be unfolding at present.

Currently, there are four primary factors driving up the price of Bitcoin prior to the 2024 Elections, as reported by Geoff Kendrick from Standard Chartered. In fact, he predicts that the Bitcoin price will reach its all-time high target of $73,800 and potentially surpass it further.

1. Significant Attention From US Presidential Election

Throughout the course of this year, Donald Trump, who was once a former U.S. president and current presidential candidate, has rebranded himself as an advocate for cryptocurrency. This shift in stance comes despite his previously critical views towards the industry. In doing so, he has crafted a new image for himself within the crypto community, where he actively promotes helping the crypto sector grow. As a result of this newfound popularity, Trump has successfully raised $7.5 million in cryptocurrency donations. Interestingly, Kamala Harris, the U.S. Vice President and another presidential candidate, also seems to be adopting a more favorable stance towards cryptocurrency investors by offering promises of fair regulation. Consequently, the upcoming U.S. presidential election is generating significant buzz in the crypto market, potentially boosting the value of tokens.

In this scenario, it’s apparent that Trump is confident about his objective, yet financial experts suggest that the US election results won’t impact the value of the industry, and cryptocurrencies such as Bitcoin will persist in their growth irrespective of the incoming President. Corroborating with this viewpoint, the Chief Investment Officer at Bitwisise predicted that Bitcoin could reach its all-time high (ATH) before the elections concluded. However, some argue that a Trump victory would be advantageous for Bitcoin’s price and foresee it surging to $90K. The odds of such an outcome are also substantial in the current market, as Donald Trump maintains a considerable lead over Kamala Harris based on Polymarket data.

2. Growing Demand for Spot Bitcoin ETFs Pushing Bitcoin Price

As an analyst, I find that the escalating interest in Spot Bitcoin Exchange-Traded Funds (ETFs) is a key driving force behind the current surge in Bitcoin’s price. Upon gaining approval early this year, the appeal of these ETFs has soared dramatically, amassing over $19 billion in net inflows. This popularity not only satisfies the demand for Bitcoin but also propels its price upward.

Currently, the ETF has seen its largest one-day investment influx since June, amounting to $555.8 million. This is a significant figure. Furthermore, there’s been a surge in Bitcoin call option activity among users. Over the past week, crypto investors have increased the open interest for the 80K call option by 1500 Bitcoins, which will expire on December 27. This suggests that investors are positioning themselves for potential price increases.

11 Bitcoin Exchange-Traded Funds (ETFs) experienced a significant surge in investments amounting to approximately $556 million on October 14, 2024. This influx coincided with a 4.6% rise in the price of Bitcoin!

Significantly, this represents the biggest single-day increase since June 5, 2024, and it ranks as one of the top 8 inflows into Bitcoin ETFs since their introduction.

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— Spot On Chain (@spotonchain) October 15, 2024

Following an examination of the excitement surrounding Bitcoin Exchange-Traded Funds (ETFs), experts predict that these might propel the Bitcoin price up to approximately $115,000 over the next several months.

3. S&P 500 Opening At New High Plus Uptober Anticipation

The Bitcoin price has been boosted by data from the S&P 500 and optimistic forecasts about China’s inclination towards the crypto industry. This positive momentum has pushed the BTC price to a monthly high, mirroring the all-time high opening of the S&P 500 index, signaling a bullish market trend. While not directly linked, it is worth noting that one financial market can influence another based on their performance.

Furthermore, there’s been lots of excitement surrounding Uptober, traditionally the most lucrative month for Bitcoin over the past 13 years according to recent reports. Yet, the initial fortnight of the month has underperformed, with the crypto market dipping into the red, dampening expectations for Uptober. However, as in previous years, the growth in Bitcoin prices reversed after the first two weeks. And now, a new report from Coingalss shows a +6.83% increase in monthly value, fueling renewed interest in this cryptocurrency.

Why Is Bitcoin Price Rising Before 2024 Elections?

4. Large Company Holding in BTC Boosting User Confidence

Initially, Microstrategy under Michael Saylor was renowned as the corporation with one of the largest Bitcoin holdings globally. Yet, other companies are now aspiring to match this. Among them is Metaplanet, which holds 855 bitcoins and is often referred to as ‘Asia’s MicroStrategy’.

In contrast, this pales in comparison to Microstrategy’s massive 252,500 BTC stash, valued at approximately $16.6 billion. Notably, CEO Michael has disclosed their strategic intentions to transform or grow into a Bitcoin-focused entity, reinforcing the public’s perception of cryptocurrency’s potential and significance.

Despite Elon Musk’s company having substantial investments in this digital currency, today alone, Tesla transferred approximately $759 million from its Bitcoin reserves. This action by major corporations like Tesla is bolstering the faith of users in this cryptocurrency, as their trust in Bitcoin’s robust qualities and potential becomes evident.

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2024-10-16 15:42