Bitcoin’s price surged to $65,000 after a period of trading sideways, with experts pointing to the US Federal Reserve’s economic policies as a key factor. The relationship between Bitcoin and the US central bank’s actions has been evident over the past few years, particularly since the COVID-19 crash. The unprecedented inflation spike following the crash led to a significant increase in interest rates, resulting in a decrease in funds allocated to risk-on assets like BTC. Many experts anticipated a price surge once the US Fed pivoted from its strategy, following in the footsteps of other central banks such as the ECB, Bank of England, and Bank of Canada.
US Presidential Election Cycle
Bitcoin’s price has also been closely correlated to the current US presidential election cycle. The Democrats, under President Joe Biden, have not been particularly supportive of the crypto industry, as evidenced by the SEC’s actions. On the other hand, Republican candidate Donald Trump has shown a more positive outlook towards the industry, promising favorable conditions for Bitcoin and miners. Trump’s commitment to firing the SEC’s Chair, Gary Gensler, on his first day in office was seen as a significant boon for the crypto market. With Biden’s withdrawal from the 2024 race and the subsequent replacement by VP Kamala Harris, the dynamics of this year’s elections have changed.
Recent Developments
Recent news of independent candidate Robert F. Kennedy suspending his campaign and endorsing Trump has further fueled positive sentiments towards the Republican candidate and the crypto industry. Kennedy, known as a vocal supporter of Bitcoin, lending his support to Trump was seen as a favorable development for both Trump’s campaign and the crypto market. This endorsement, coupled with the anticipation of the US Federal Reserve announcing a cut in interest rates in September, likely contributed to Bitcoin’s price surge from $60,000 to $65,000 within 24 hours.
Overall, the convergence of the US Federal Reserve’s economic policies and the shifting dynamics of the US presidential election cycle have contributed to Bitcoin’s recent price surge. As the market continues to react to these external factors, investors and analysts will closely monitor any developments that could further impact the cryptocurrency’s price movements.
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