Bitcoin

Here’s What’s Next This Week

Published

2 months ago

September 23, 2024

Coin2049 Newsletter

As the last week of September commences, financial markets look out for multiple US economic events. However, a handful of them will influence the portfolio and investment strategies of crypto investors, either directly or indirectly.

Bitcoin (BTC) is off to a good start this week, holding well above the $63,000 threshold in the early hours of the Asian session.

Manufacturing and Services PMI

The business survey committees will release data about the purchasing managers’ index (PMI) for manufacturing and services on Monday. The report will shed light on the health of these sectors.

With a previous index of 55.7 and a median forecast of 55.4, a higher PMI above 50 would suggest expansion in the manufacturing and services sectors. This could be positive for risk assets like Bitcoin, especially if the report signals economic growth.

Consumer Confidence and Consumer Sentiment

The consumer confidence report, set to release on Tuesday, September 24, will be followed closely by the consumer sentiment report on Friday. These two surveys, though from different sources, gauge how optimistic or pessimistic consumers feel about the economy’s future.

Both reports reflect consumer attitudes toward their financial outlook and their perception of business conditions and the job market for the next six months. Essentially, they offer a snapshot of how people feel about the economy today and in the near future.

As inflation eases in the US, optimism among consumers is growing. This positive shift is largely due to expectations that inflation will continue to decline through the end of the year, making it easier for households to manage their finances.

If these reports show increased confidence and sentiment, it could suggest a greater willingness among consumers to spend. This improved outlook could also have a ripple effect, potentially benefiting speculative assets like Bitcoin. A more confident consumer base typically means greater risk tolerance, which bodes well for investments perceived as high risk but high reward.

Q2 GDP

The second-quarter Gross Domestic Product (GDP) report, set for release on Thursday, is one of the week’s key economic indicators. This will be the second revision following July’s initial report, which showed a 2.8% increase quarter-over-quarter. That figure significantly surpassed the prior quarter’s 1.4% growth.

The rise in domestic spending has been the main driver behind GDP growth. Increased consumer spending often boosts the economy and inflation while strengthening the US dollar. Conversely, a slowdown in spending could reduce these effects.

A strong GDP report could bolster US citizens’ confidence in the economy’s stability. This positive sentiment may also benefit Bitcoin’s price, as many investors view it as an alternative investment or hedge. Additionally, robust economic data could reinforce the Federal Reserve’s more measured approach to monetary policy. Crypto investors are particularly attuned to Fed policies, as they directly influence market liquidity and conditions.

Fed Speaks: Jerome Powell and Michelle Bowman

Federal Reserve Chair Jerome Powell is scheduled to deliver his opening remarks on Thursday, with markets eagerly awaiting his commentary following recent inflation data and the Federal Open Market Committee’s 50 basis-point interest rate cut. Powell’s statements could have a significant impact on market sentiment.

In addition to Powell’s address, several other Fed officials will speak throughout the week. Crypto investors are expected to closely monitor these comments between Monday and Friday, especially following last week’s unexpected rate cut. Of particular interest is Fed Governor Michelle Bowman, who is slated to speak on both Tuesday and Thursday.

“The committee’s larger policy action could be interpreted as a premature declaration of victory on our price stability mandate. I believe that moving at a measured pace toward a more neutral policy stance will ensure further progress in bringing inflation down to our 2% target,” Bowman said in a statement on Friday.

Bowman has become a focal point due to her dissenting stance on the recent policy decision, marking the first Fed governor to hold a variant view since 2005. Given her unique position, Bowman’s upcoming remarks will be closely watched, as investors seek clarity on her concerns about the speed of rate reductions.

Core PCE Inflation

The Personal Consumption Expenditures (PCE) Price Index, due on Friday, will be a key economic indicator to watch this week. The core PCE, which excludes volatile categories like food and energy, is one of the critical data points the Federal Reserve uses to assess inflation trends and guide future monetary policy decisions.

Analysts predict a 0.2% month-over-month rise in core PCE and a 2.7% year-on-year increase. Meanwhile, headline inflation is expected to slow to 2.3%.

If PCE inflation comes in lower than expected for August, it could boost the likelihood of additional interest rate cuts, a development that would be favorable for Bitcoin. Lower rates tend to encourage borrowing, leading to increased liquidity in the financial markets.

BTC Price Performance, Source: BeInCrypto

For Bitcoin, an environment of lower rates and more liquidity is typically positive, as investors often turn to riskier assets during such periods. BeInCrypto data shows Bitcoin is trading for $63,882 at the time of writing, up by 1.51% since the Monday session started.

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Trump and Lummis Unite on $76 Billion National Bitcoin Reserve

Published

4 hours ago

November 7, 2024

Coin2049 Newsletter

Senator Cynthia Lummis is making a bold new proposal to establish a Bitcoin reserve in the US. This follows President-elect Donald Trump’s recent declarations in the run-up to the US elections.

Her bill, the BITCOIN Act of 2024, aims to have the US Treasury acquire 1 million Bitcoin (BTC) over five years, a massive move that would position the US as a leader in financial innovation.

Senator Cynthia Lummis Advocates Bitcoin Reserve

The Wyoming senator wants the plan spread across five years, with purchases of 200,000 BTC tokens every year to develop America’s Bitcoin reserve. At current rates, that translates to an investment of about $76 billion.

“We are going to build a strategic Bitcoin reserve,” Lummis shared on X (formerly Twitter).

Notably, Lummis’s side of the political divide now holds the majority in both the Senate and House committees. According to Stand With Crypto, 261 pro-crypto candidates have been elected to the House of Representatives against 116 anti-crypto candidates. On the other hand, there are 17 pro-crypto candidates in the Senate and 12 anti-crypto lawmakers.

With this, the chances of Senator Lummis’ Bitcoin Bill passing through Congress are far better. This is as opposed to the Biden administration, where efforts toward bipartisan bills were greatly stifled due to a divided Congress.

This political alignment, along with Bitcoin’s recent surge to a new all-time high, adds momentum to Lummis’ initiative. Industry leaders, including Michael Saylor of MicroStrategy and Samson Mow, have shown support, stressing Bitcoin’s potential as a national asset.

Mow highlighted Bitcoin’s value at sub-$100,000, pointing out its potential strategic importance if prices soar above $500,000 in coming years.

“Good luck Senator Lummis. I suggest acting quickly. The difference between acquiring Bitcoin below $0.1 million vs. $0.5 million will have massive geopolitical ramifications,” Mow wrote.

Framework for Secure BTC Management

The BITCOIN Act does not stop at Bitcoin acquisition. It also introduces a framework for managing Bitcoin securely within Treasury vaults. It aims to reduce national debt by half by 2045. This would serve as a hedge against inflation and a potential powerhouse for US debt management.

President-elect Trump publicly endorsed the creation of a national Bitcoin reserve during the Bitcoin 2024 conference in Nashville. His remarks continue to stir interest among crypto proponents and Republicans as the then-presidential aspirant emphasized Bitcoin as a “core of financial independence” for the US.

“It will be the policy of my administration…to keep 100% of all the Bitcoin the US government currently holds or acquires into the future. This will serve in effect as the core of the strategic national bitcoin stockpile…It’s been taken away from you,” Trump said.

Meanwhile, state governments are also eyeing Bitcoin, with Florida’s Chief Financial Officer Jimmy Patronis recently endorsing Bitcoin as a “strategic reserve” for state pensions. Florida’s pension fund, among other states like Wisconsin and Michigan, would benefit from Bitcoin’s long-term appreciation, diversifying investments amid economic uncertainty.

Nevertheless, while the plan has garnered support, it raises questions about economic risks and global impacts. Some economists warn of potential volatility in tying national debt management to cryptocurrency. However, advocates point to Bitcoin’s finite supply and growing international adoption as a hedge against inflation and market fluctuations.

With Trump’s support, a Republican-led Congress, and growing state-level backing, the plan has momentum. This makes the concept of a national Bitcoin reserve a closer reality than ever before. If implemented, the BITCOIN Act could place the US at the forefront of a global financial evolution.

“Other countries will follow,” another popular user on X added.

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Bitcoin Price Might Never Dip Below $70,000 Again After The US Elections, Here’s Why

Published

12 hours ago

November 7, 2024

Coin2049 Newsletter

The US presidential elections have come and gone, and the only thing left is the results. Interestingly, a snapshot of the Bitcoin price during the elections showed Bitcoin trading just above $70,000. This is a notable price to follow, as history shows this might be the price support for Bitcoin in the foreseeable future. Interestingly, this phenomenon goes back to the Bitcoin price levels in previous US elections.

Why Bitcoin Price Might Never Dip Below $70,000 Again

Bitcoin has largely been on an uptrend since Monday, when it kicked off a run after it rebounded to the upside from $67,000. This run continued, allowing the Bitcoin average price during the 2024 presidential elections to be around $70,110.

Historically, U.S. election cycles have often been accompanied by shifts in Bitcoin’s value, marking crucial price points that tend to establish longer-term support levels.

To understand this trend, we need to look at the past four election cycles. Back in 2012, during the early days of the crypto industry, the Bitcoin price traded at a modest $10 on the US presidential election day, a price point that now seems almost unimaginable. By 2016, Bitcoin’s election-day price had climbed to $710, setting a new baseline that it has never revisited since.

The most interesting one was what happened after the 2020 US presidential election, when the Bitcoin price was trading around $13,555. The Bitcoin price has never revisited this price point again since then up until the time of writing. What’s more interesting is that this price point even served as the lowest support level during the 2022 bear market price crash.

If these historical trends are any indication, the 2024 election-day price of $70,110 could become a similar stronghold and a price floor for Bitcoin in the coming years. This level might even serve as critical support should a bear market eventually take hold at any point.

What’s Next For The Bitcoin Price?

As of now, Bitcoin is trading above $73,200 after experiencing an intense surge over the past 24 hours. This remarkable rally saw Bitcoin climb nearly 10% within a single day, reaching an intraday high of $75,358. This milestone has now become Bitcoin’s highest trading level, as it broke past its previous all-time high of $73,737 in March 2024.

Although the Bitcoin price has pulled back slightly likely due to some investors cashing in on recent profits, the rally is expected to resume anytime from now. Considering this momentum, Bitcoin remains well-positioned to challenge the $80,000 mark before the end of November, especially if buying interest continues to drive the current uptrend.

Bitcoin price chart from Tradingview.com — BTC price above $74,000 | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

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Bitcoin

Bitcoin Price After US Presidential Elections: Here’s How BTC Reacted To Previous Winners

Published

1 day ago

November 6, 2024

Coin2049 Newsletter

Market analysts have continued to deliberate on how the Bitcoin price could react to a Donald Trump or Kamala Harris victory in the US presidential elections. History indicates that Bitcoin’s future trajectory is bullish, irrespective of who wins the elections.

How The Bitcoin Price Has Reacted To Previous Winners

The Bitcoin price has always hit a new all-time high (ATH) regardless of the winners in the past US presidential elections. In 2012, after Barack Obama won the elections, Bitcoin rallied and reached a new ATH of $1,200 in 2013. Its price then consolidated until the next election in 2016.

The 2016 US presidential elections, which Donald Trump won, also sparked the beginning of another impressive rally for the Bitcoin price, which rose to a new ATH of $19,000 the following year. In 2020, following Joe Biden’s victory in the US presidential election, BTC rose to a new ATH of $69,000.

The Bitcoin price rally after the US presidential elections is believed to be due to the market certainty that the election aftermath provides. Meanwhile, based on history, the BTC rally could begin as soon as December, with the flagship crypto hitting a new ATH as soon as January 2024.

In 2016, the Bitcoin price rally began about three weeks before the election and went on to hit a new high in the first week of January 2017. In 2020, BTC had also consolidated for about six months before it began to rally from $11,000 just about three weeks before the US elections and then went on to reach a new high of $42,000 in January 2021.

Bitcoin’s recent price action also looks to be playing out the same way as BTC began rallying in mid-October and even came close to hitting its current ATH of $73,700 late last month. As such, there is the possibility that the flagship crypto could again retest this ATH and surpass it as soon as January 2024 or even before then.

There Could Be Some Volatility In The Coming Days

In an X post, Crypto analyst Ali Martinez warned that the days following the last three US presidential elections have been volatile for the Bitcoin price. However, he added that the overall trend has stayed upward.

Economist and crypto analyst Alex Krüger also warned about the potential pullback the Bitcoin price could face after the US elections. He claimed that there is a 45% chance that BTC could drop to as low as $65,000 if Kamala Harris wins the elections.

Due to his pro-crypto stance, Donald Trump looks to be the most preferred candidate in the crypto community. As such, the market could initially react negatively to a Harris win while taking in Trump’s loss.

At the time of writing, the Bitcoin price is trading at around $68,000, down in the last 24 hours, according to data from CoinMarketCap.