"Trump trade" heating up! Bitcoin broke 70,000 again, all the way, bull market is really coming?

Recently, stimulated by multiple news, cryptocurrency blossomed across the board. After four months, on October 29th, Bitcoin once again touched the 70,000 dollar mark, with a rise of 3.81% within 24 hours.

The surge caused many bears to liquidate their positions. Within an hour, the amount of liquidation in the cryptocurrency market exceeded 1.6876 million US dollars. Within 24 hours, the total number of liquidated positions was nearly 70,000, and the liquidation amount reached 229 million US dollars. As of October 30th, the price of Bitcoin exceeded 72,000 US dollars, and other cryptocurrencies also rose collectively.

Why has Bitcoin experienced a crazy rise in recent days?

Market analysts believe that the sharp rise in Bitcoin price is closely related to multiple news factors. Especially, the progress of the US election has had a significant impact on market sentiment. In addition, there are other positive factors that have led to the rise in Bitcoin price. We will analyze these factors in detail below.

Short-term and long-term benefits intertwine

In the short term, the upcoming US presidential election and loose Monetary Policy are seen as the main “catalysts” driving up the price of Bitcoin.

As the official voting day of the US presidential election approaches, the market’s enthusiasm for Bitcoin is increasing. For the cryptocurrency market, whether Harris or Trump takes office, it is a good thing in the long run.

Although US Democratic presidential candidate Harris has a cautious attitude towards cryptocurrency, she is more friendly than the Biden administration’s relatively negative attitude towards cryptocurrency policy. After she promised to support the regulatory framework for cryptocurrency in mid-October, Bitcoin once climbed to its highest level in the previous two weeks.

Bitcoin is seen as part of the “Trump deal”. Trump has been courting the cryptocurrency industry this year and promoting himself as a pro-cryptocurrency candidate, vowing to make the US the global cryptocurrency capital. His attitude has led investors to believe that if Trump is elected, the cryptocurrency market may usher in more friendly regulatory environments and policy support, thereby enhancing confidence in cryptocurrencies such as Bitcoin. As a result, funds have flowed into the Bitcoin market, driving up its price.

According to some data and predictions, Trump has a higher approval rating in the prediction market and surpasses his opponent Harris in some swing states. As the US election approaches, the possibility of Trump’s victory increases. Investors generally believe that if Trump is successfully re-elected, the cryptocurrency market may usher in more friendly regulatory environments and policy support, thereby pushing up the price of Bitcoin.

In addition, many central banks around the world have adopted loose Monetary Policies, which have increased liquidity in the market. The Federal Reserve unexpectedly cut interest rates by 50 basis points in September, causing Bitcoin to rise in response! Now, the market generally expects a 25 basis point interest rate cut in November, which is seen as a positive factor, after all, the beginning of the last bull market was the interest rate cut in March 2020.

The continued interest rate cuts by the Federal Reserve will inject more liquidity into global markets, greatly benefiting risky assets. With increasing liquidity, the sentiment in the cryptocurrency market is also significantly improving, and investor confidence is recovering!

In the long run, Bitcoin’s fundamentals are also supported by strong demand.

First of all, the application prospect of Bitcoin in the financial industry has been clear, and its application in financing, lending and other financial models has become the most active field of financial innovation. The financial model around Bitcoin has also become the core content of digital finance, which is the fundamental reason for the continuous rise in Bitcoin prices.

Secondly, under the premise of clear practical use of Bitcoin, with the landing of Bitcoin futures and spot ETFs, Bitcoin has become the mainstream asset allocation of asset management institutions. Financial Institutions’ allocation and holding of Bitcoin have increased the demand for Bitcoin, further supporting its price to continue to rise.

Giants enter the game! Funds are flowing in crazily

In March 2020, the price of Bitcoin reached a historic high of $73,798. After a period of volatility, the price fluctuated between $50,000 and $70,000 multiple times. Especially in August, the market experienced a sharp adjustment, with a monthly decline of up to 10.25%. However, in September, benefiting from global central banks’ interest rate cuts and policies to increase market liquidity, Bitcoin successfully reversed the decline and achieved a monthly growth of 7.35%, setting a record for the best performance in September in history. In the following month, the price of Bitcoin continued to steadily rise, with a monthly increase of 12.30%.

During this period, the Bitcoin market has attracted a large amount of capital inflows. According to data from asset management company CoinShares, the inflow of funds into Bitcoin ETFs reached as high as $920 million in the week ending October 25th. The total inflow since the beginning of the year has reached $25.40 billion, which is almost three times the inflow in the same period of 2021. Despite the recent investigation by US regulators of Tether, the world’s largest stablecoin publisher, the market’s interest in cryptocurrency has not diminished. The total market value of cryptocurrency rose by 2.28% this Monday, reaching $2.33 trillion.

In the asset management industry, BlackRock (BLK. N) has set a new record for bitcoin purchases in the past two weeks, purchasing 34,085 bitcoins worth about $2.40 billion. Currently, BlackRock holds more than 400,000 bitcoins, with a market value of over $28 billion. As of the end of the third quarter of this year, BlackRock’s total assets under management (AUM) reached an astonishing $11.48 trillion.

In addition, tech giant Microsoft (MSFT. O) plans to vote on the proposal to “evaluate investing in Bitcoin” at its annual meeting in December, highlighting the potential of Bitcoin as a tool to prevent inflation. The buying intentions of these institutions and tech giants are undoubtedly a major driving force behind the surge in Bitcoin prices, and many positive factors have jointly driven the market’s prosperity.

Bitcoin halving expectations and optimistic market sentiment boost

Bitcoin will undergo a block reward halving approximately every four years, which means that the output of mining will decrease, thereby affecting the supply of Bitcoin. It is expected that the next halving will occur in April 2025. This event has attracted widespread attention from investors and prompted them to invest in advance in order to obtain potential profits before the halving, thereby increasing demand for Bitcoin and increasing its price.

With the continuous rise of Bitcoin price, market sentiment has gradually become optimistic. Investors are full of confidence in the future trend of Bitcoin and have bought it one after another, forming a self-reinforcing cycle. This optimistic sentiment has spread in the market, attracting more investors to participate and further promoting the rise of Bitcoin price.

Can it go up again? Institutions predict: or as high as $200,000

With the continuous rise of Bitcoin price, the market’s expectations for its future performance have become more optimistic. Options traders are increasing their bets on Bitcoin, predicting that it will break through the historical high of $80,000 by the end of November, and some institutions have set a considerable target price. Investment bank Bernstein predicts that by the end of 2025, the price of Bitcoin may reach as high as $200,000.

Looking ahead to the after-market, cryptocurrency is dominated by optimistic bullish sentiment. Data shows that the call-over price of bullish options expiring on November 8th is concentrated at $75,000, and the exercise price of bullish options (non-position squaring contracts) expiring on November 29th is concentrated at around $80,000.

David Lawant, head of research at cryptocurrency broker FalconX, said: “We believe the market consensus is that Bitcoin is likely to perform well regardless of the outcome of the US election. The team’s analysis shows a clear upward trend in options activity around the upcoming election.”

Many institutions have given more substantial target prices. Investment bank Bernstein predicts that by the end of 2025, the price of Bitcoin may reach as high as $200,000.

Unocoin co-founder and CEO Sathvik Vishwanath stated that Bitcoin has a certain cyclicality. In the past, it usually experienced strong growth at the end of the year, and a similar trend may be repeated in 2024. Historical trends show that Bitcoin has an average increase of 26% in October, 36% in November, and 11% in December, which supports the optimistic expectation that Bitcoin may exceed $100,000.

Multiple factors will support the long-term rise of Bitcoin price. In addition, as the Bitcoin market transitions to an institutional-dominated market, the amplitude of price fluctuations will continue to converge and may not necessarily reach $80,000 in the short term.

Although the market is optimistic about the long-term growth of Bitcoin, there are also some latent risks. For example, if Bitcoin continues to be a regulatory focus of the government and its energy consumption is subject to stricter regulation, this may put pressure on its price increase. In addition, with the reduction of block rewards, the security of cryptocurrency also faces challenges, which requires continuous attention from market participants.

What should ordinary investors do?

Currently, Bitcoin has received various benefits, which has stimulated investors’ enthusiasm for investment. However, when participating in market transactions, investors should closely monitor key technical indicators and market dynamics to make wise investment decisions. Therefore, when purchasing cryptocurrency, investors need to choose a safe and reliable trading platform, conduct in-depth research and understanding of each trading platform, and it is recommended that everyone learn about BiyaPay.

Using traditional methods to purchase cryptocurrencies such as Bitcoin often encounters some difficulties, such as bank cards being frozen during deposits and withdrawals. To avoid this risk, you can prepare an overseas bank account in advance for exchanging domestic currency into US dollars, withdraw to the account, and finally use US dollars to purchase cryptocurrencies such as Bitcoin on the BiyaPay platform to complete the deposit. The same applies to withdrawals, which can be done in the opposite way.

How to Avoid Risks in the Bitcoin Craze?

However, it is worth noting that the volatility and risk of the Bitcoin market are still high. Although Bitcoin’s rise is strong this time, market investors still need to remain vigilant and guard against possible pullback risks.

On the one hand, the regulatory environments of the global cryptocurrency market are still relatively complex, and there are differences in regulatory policies for cryptocurrencies in different countries and regions, which may lead to greater price fluctuations of cryptocurrencies such as Bitcoin in different markets.

On the other hand, the price of cryptocurrencies such as Bitcoin is influenced by various factors, including market sentiment, macroeconomic environment, technological innovation, etc. Changes in these factors may cause fluctuations in the price of Bitcoin.

In addition, investors need to pay attention to preventing related risks when participating in cryptocurrency transactions such as Bitcoin.

On the one hand, the cryptocurrency trading market has high risks. Investors need to fully understand market dynamics and risk factors, formulate reasonable investment strategies and risk control measures. On the other hand, investors also need to pay attention to protecting their account and fund security, avoiding risks such as hacker attacks and fraud.

Market investors should be cautiously optimistic about the future of Bitcoin.

On the one hand, with the gradual recovery of the global economy and the continuous development of blockchain technology, the application scenarios and market demand of cryptocurrencies such as Bitcoin will further expand, which provides strong support for the future development of Bitcoin. On the other hand, the regulatory environments for cryptocurrencies worldwide are also gradually improving, which provides a more favorable environment for the development of cryptocurrencies such as Bitcoin. However, investors still need to remain vigilant and guard against possible risks and challenges when participating in cryptocurrency transactions such as Bitcoin.

In short, the rise of Bitcoin to $70,000 has once again triggered high volatility and risk in the Bitcoin market for global investors and markets. However, with the gradual recovery of the global economy and the continuous development of blockchain technology, the application scenarios and market demand of cryptocurrencies such as Bitcoin will further expand, providing strong support for the future development of Bitcoin. Investors should maintain a cautious attitude when participating in cryptocurrency transactions such as Bitcoin, fully understand market dynamics and risk factors, and formulate reasonable investment strategies and risk control measures.