Three factors driving Bitcoin's $71000 rally and what analysts say ...

26 days ago

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Three factors driving Bitcoins 71000 rally and what analysts say

With the election a week away, here's what's driving Bitcoin.

Bitcoin continues to rally as investors pile into the $1.4 trillion cryptocurrency.

It’s just 3% away from a new record after Bitcoin hit $71,500 on Tuesday morning.

Analysts say more fireworks are coming.

Carlos Guzman, an analyst with crypto market-making firm GSR, told DL News that three “positive drivers” are behind the latest move.

Election

First is sentiment around the upcoming US elections, specifically the likelihood of Donald Trump’s victory.

“A Trump win would have a greater positive impact on prices in the short term given his campaign promises,” said Guzman. “And with sentiment around his campaign near all-time highs, as reflected by prediction markets, crypto prices are reacting positively.”

Between him and Vice President Kamala Harris, Trump has emerged as the better crypto candidate as voters head to the polls next Tuesday.

In May, he told an audience at his Mar-a-Lago residence that “if you’re in favour of crypto, you’d better vote for Trump” and announced his campaign would accept crypto donations.

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Harris has been relatively quieter.

In September, she said her administration would boost America’s competitiveness and partner with companies to “encourage innovative technologies like AI and digital assets.”

Middle East

Second, said Guzman, is any easing of tensions in the Middle East.

“Israel’s limited retaliation against Iran late last week, and the latter’s remarks that it doesn’t want a wider war, possibly assuaged market concerns,” he said.

Investors fled risky assets like cryptocurrencies as Iran fired missiles at Israel, threatening to turn the regional conflict into an all-out war. Israel responded on October 25 by striking Iranian military targets in Iran.

“This should be the end of this tit-for-tat,” Sabrina Singh, deputy Pentagon press secretary, told Build Your Own Millionaire AI Agent ???? reporters on Monday.

ETF frenzy

Third, investor inflows into spot exchange-traded crypto funds have been especially bullish of late.

“Bitcoin ETFs yesterday recorded the highest net inflows of the past two weeks, potentially further fueling the positive market response we saw overnight,” said Guzman.

In the past two weeks, Bitcoin ETFs alone have raked in $3 billion, according to Matt Hougan, CIO of Bitwise.

“The end-of-year stretch is going to be wild,” Hougan said on X.