Bitcoin

Key for Crypto Market Trends

Published

2 months ago

September 2, 2024

Coin2049 Newsletter

The cryptocurrency markets are closely watching several key US macroeconomic events this month, which could significantly impact portfolios. Fed interest rates announcements in particular will be a key print in September.

Positive economic data often influences investor sentiment in the crypto space. As traditional markets strengthen, investors become more confident in the overall economy, and vice versa. This could influence risk appetite and, ultimately interest in alternative assets like cryptocurrencies

US Economic Events to Watch in September

Bitcoin (BTC) has slipped further from the $60,000 psychological level, continuing its sluggish performance despite positive catalysts. Factors like growing institutional adoption, a potentially more favorable regulatory environment, and expected Federal Reserve (Fed) rate cuts have done little to boost BTC’s price.

Currently, Bitcoin is over 20% below its recent all-time high of nearly $73,500, recorded more than five months ago. As the new month begins, crypto market participants are closely watching key events, particularly because historical data indicates that September has traditionally been Bitcoin’s worst-performing period.

Bitcoin Monthly Returns. Source: CoinGlass

Non-Farm Payrolls, Unemployment Rates

Investors will keep a close eye on the upcoming US Non-Farm Payrolls (NFP) report, which includes key data on job creation and the unemployment rate. The July report showed weaker-than-expected job growth with 114,000 jobs added, leading to a median forecast of 162,000 for August.

If August’s NFP figures are strong and the unemployment rate declines, it could indicate a robust economy, which might positively influence investor sentiment toward cryptocurrencies. Employment-related reports like these can significantly affect market sentiment, risk appetite, and the overall economic outlook, indirectly impacting Bitcoin and the broader crypto market.

Before the NFP report, the Job Openings and Labor Turnover Survey (JOLTS) data, set to be released on Wednesday, will offer insights into the labor market’s health. A median forecast of 8.1 million job openings in July, slightly down from 8.18 million, could indicate a growing economy, increased consumer spending, and potential wage growth.

Additionally, the ADP National Employment Report, due on Thursday, will provide a snapshot of private sector employment. If July’s ADP report exceeds the previous 122,000 jobs added, it would signal strong job creation and economic growth

Donald Trump Debate Against Kamala Harris

On September 10, the Republican and Democrat presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming key issues in the campaign, this event could trigger volatility in the Bitcoin and broader cryptocurrency markets.

Both parties have shown an interest in crypto, with Harris reportedly warming up to pro-crypto policies.

“They’ve expressed that one of the things that they need are stable rules, rules of the road…focus on cutting needless bureaucracy and unnecessary regulatory red tape… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the road,” Bloomberg reported, citing Brian Nelson, a senior advisor on Vice President Harris’ campaign.

On the Republican side, Trump’s team is working to position the US as the world crypto capital. As both candidates seek to connect with the crypto community, the debate is expected to be intense, especially given Trump’s combative style and Harris’s background as a prosecutor.

US CPI

The US Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. This data measures the rate of inflation by tracking price changes in consumer goods and services. In July, the CPI inflation rate came in at 2.9%, slightly lower than the 3% recorded in June, according to the US Bureau of Labor Statistics (BLS).

The August CPI data will be crucial for determining whether inflation is continuing to slow, as the Federal Reserve targets a 2% inflation rate. If the CPI falls below 2.9%, it would suggest that inflation is moving in the right direction, potentially reducing the pressure on the Fed to maintain high-interest rates.

Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched. Both have previously indicated a possible shift towards looser monetary policy as inflation shows signs of easing and the labor market stabilizes. If their upcoming speeches express confidence that the disinflationary trend is holding steady, it could be bullish for the cryptocurrency market.

Currently, price pressures are easing across the economy, with declines in goods prices, slower increases in housing costs, and more moderate wage growth contributing to a broader reduction in inflation, especially in the services sector. This trend, if sustained, could positively influence investor sentiment, particularly in riskier assets like cryptocurrencies.

US PPI

The day after the CPI data is released, the US Bureau of Labor Statistics will publish the US Producer Price Index (PPI) inflation data. In July, the PPI showed more significant easing than expected, providing relief for both stocks and Bitcoin.

Specifically, the US PPI inflation rate decreased to 2.2% year-on-year (YoY) in July, below the expected 2.3% and down from the previous period’s revised 2.7%. Similarly, Core PPI inflation, which excludes food and energy prices, dropped to 2.4% YoY in July, also below the forecast of 2.7% and significantly lower than the previous 3.0%.

If the August PPI data, set to be released on September 12, shows continued declines in inflationary pressure, it could boost risk appetite among investors, favoring assets like Bitcoin and other cryptocurrencies.

Fed Interest Rate

Another key event this month will be the Federal Reserve’s interest rate decision on September 18. In its previous meeting, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged, with policymakers unanimously voting to maintain the benchmark overnight borrowing rate between 5.25% and 5.50%.

However, during a recent meeting, Fed Chair Jerome Powell expressed increased confidence that inflation is on a sustainable path toward the Fed’s 2% target.

“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell stated.

Fed Target Rate Probabilities, Source: CME Fed Watchtool — Fed Target Rate Probabilities. Source: CME Fed Watchtool

This signals that the Fed may be nearing the end of its rate-hiking cycle, depending on the latest economic data. Markets participants will closely watch the upcoming decision, as it could widely impact financial markets, including cryptocurrencies.

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Bitcoin

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.

BTC Price Performance. Source: BeInCrypto

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

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.