Bitcoin has been suffering along with the rest of the crypto sector as of late, macroeconomic headwinds have weighed on the market since mid-December, causing analysts to question their previous expectations of Donald Trump’s inauguration as a ‘sell the news’ event.
Analysts at K33, a digital asset-focused brokerage founded in 2018, had previously favoured selling Bitcoin at the 20 January inauguration, as expectations of Trump’s pro-Trump campaign promises met the US political machine rather slowly.
But in reality, it seems that the ‘wind’ is changing. In fact, the ‘sell the news’ has become less interesting as the inauguration has approached, with the market attempting to weigh Trump’s inflationary effect against potential tax cuts and favourable crypto policies that are expected to increase in this 2025.
Bitcoin peaked at just over $108,000 on 17 December, but subsequently fell almost 18 per cent to a low of around $89,000 on Monday as 10-year yields rose, the dollar strengthened and expectations of a Federal Reserve rate cut diminished.
Comparing the post-election reaction during Trump’s two terms in office, the S&P 500 gave a positive response and this was also reflected in Bitcoin and cryptocurrencies, providing a rather important bullrun (bull market) momentum.
The last time Trump won the U.S. election, #Bitcoin pumped +2,714%.
If history repeats, #Bitcoin will be worth $2 MILLION by 2025. pic.twitter.com/gmYv2uA5kx
– Crypto Rover (@rovercrc) November 3, 2024
Will it be the same story this time?
During his first term, Trump often highlighted the stock market’s performance to emphasise economic growth linked to policies such as tax cuts, deregulation and trade deals – a narrative that analysts expect during his second term as well.
We maintain long-term bullish expectations for Trump’s impact on Bitcoin
K33 analysts say for now, we are just five days away from knowing whether the analysis will indeed be correct.
