Bitcoin (BTC) soared past $62,000 following an assassination attempt on former US President Donald Trump, who is seeking re-election. The incident over the weekend significantly boosted Trump’s chances in the upcoming November 4 election, with prediction market Polymarket raising his victory probability to 70%. This political upheaval influenced Trump-related assets, propelling Bitcoin up by 7% to over $62,500.
Significant Breakthrough in Bitcoin’s Price?
Bitcoin’s surge is particularly noteworthy as it crossed the 200-day Simple Moving Average (SMA), a key long-term trend indicator. This bullish move also broke a downtrend line originating from the highs of early June, indicating positive momentum for investors. Additionally, Trump-themed PoliFi altcoins experienced notable value increases.
Trump has recently adopted a pro-crypto stance, aiming to win over the cryptocurrency community. This shift is intended to attract voters who favor a more accommodating regulatory climate for digital assets. Experts predict that Trump will further highlight his support for the crypto sector during his speech at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27.
How Are Markets Reacting to Trump’s Potential Win?
In response to Trump’s potential re-election, the Chinese yuan and Mexican peso weakened against the US dollar. Trump’s previous term featured contentious trade relations with China, including high tariff proposals and revoking China’s “most favored nation” status. The Mexican peso also reacted negatively due to strained relations during Trump’s first term.
In the US, futures connected to the 10-year Treasury bond declined, suggesting higher yields. Analysts forecast that Trump’s victory would lead to increased government expenditure, tax cuts, and larger budget deficits. Investment banks anticipate that Trump’s re-election could steepen the yield curve, a scenario often linked with risk aversion in financial markets.
User-Usable Inferences
- Bitcoin’s move past the 200-day SMA suggests a potential long-term bullish trend.
- Trump’s pro-crypto stance could influence regulatory policies favorably for cryptocurrencies.
- The weakening of the yuan and peso reflects market anxieties over Trump’s trade policies.
- Increased government spending and tax cuts are likely outcomes if Trump wins, impacting bond yields.
Despite these political and economic uncertainties, S&P 500 futures began the trading week positively, rising by 0.18%. In contrast, Asian stocks fell due to lackluster economic growth figures from China. The DXY index, which tracks the US dollar against a basket of major currencies, rose by 0.10% to 104.19, reflecting market sentiment amid these developments.