I don’t know about you but it seems like speculation around the potential price of Bitcoin has been louder than normal recently. It’s almost like a major event has added extra fuel to the fire and sent the market into a bit of a frenzy. Oh, wait. It has!
The event that I’m talking about here is the recent assassination attempt against Donald Trump. Hours after the fatal shooting, the price of Bitcoin surged above $60,000 and is now sitting around $64,000 (at the time of writing).
Some market analysts expect the price of Bitcoin to rise even more if there are any further signs of a Trump victory.
But why did the assassination attempt cause Bitcoin to go up?
It’s all to do with Trump’s, very pro, stance on Bitcoin. The former president has been vocal about his support for cryptocurrency, recently speaking to Bloomberg Business Week about plans for a ‘US Crypto Strategy’.
Trump believes that the US should lead in the cryptocurrency industry and seems pretty keen to get there before China does!
What would a Trump win mean for the price of Bitcoin?
A Trump win would be advantageous for the cryptocurrency space. In fact, Standard Chartered’s head of forex and crypto research Geoffrey Kendrick recently shared his predictions that Bitcoin could reach $100,000 by US election day and go on to hit $150,000 by the end of 2024.
The assassination attempt against Trump has led many people to believe that the business mogul is set to win, which explains the optimism that currently circulates Bitcoin.
Trump’s pro-Bitcoin stance has captured the support of the wider crypto community and set him apart from anti-crypto Biden.
To me, it seems like Trump’s views on Bitcoin are a bit of a political play but, who’s to know for sure?
Nevertheless, the US election season has put Bitcoin on a trajectory to reach $100k a lot sooner than many people expected.
Is $100k closer than we think?
So, will Bitcoin really reach $100k by election day? The answer seems to be a resounding ‘yes’. However, it’s important to understand other factors that could influence the price of the cryptocurrency.
After all, Trump is just one cog in quite a complex machine!
Decreasing US inflation
One major factor that could affect the price of Bitcoin is US inflation data. The most recent US CPI report caused the price of Bitcoin to shoot up by two percent after the rate of inflation came in at a negative 0.1 percent.
Slowing rates of inflation have led to speculation that the US Federal Reserve will trim interest rates this year.
Rate cuts could boost the amount of money that people can afford to invest in riskier assets, like Bitcoin. This has caused many analysts to believe that rate cuts could see the price of BTC climb even further.
Nothing is set in stone yet. However, the CME Fed Watch tool put the odds of rate cuts happening at 70 percent, which is pretty likely!
Bitcoin’s 4-year cycle
Another interesting factor to be aware of is Bitcoin’s 4-year cycle. This refers to the Bitcoin halving event, which happens every 4 years.
Halving decreases the reward for mining Bitcoin, which decreases the rate at which new Bitcoins come into circulation. This reduces the total new supply of Bitcoin every four years.
The most recent Bitcoin halving occurred in April this year and the market is waiting to feel the effects. Historically, halving events have been positive for the price of Bitcoin.
After the 2020 halving, Bitcoin soared to $60,000 (it was trading at around $9,000 before the halving event!). It wasn’t until several months after the halving that Bitcoin reached its new all-time-high – the halving happened in May 2020 and the coin didn’t reach $60,000 until March 2021.
History has a habit of repeating itself and if this is the case, the full effects of the most recent Bitcoin halving might not be felt until early 2025.
Considering the monumental growth that Bitcoin experienced in 2020, it seems plausible to me that the coin is on its way to $100k!
Of course, it is impossible to predict the future and there is no way of knowing for sure whether Bitcoin will reach $100k. Investing in cryptocurrencies is high-risk and you should conduct your own research before making any decisions.
If you are interested in taking advantage of Bitcoin’s potential but don’t feel confident enough to buy cryptocurrency directly, check out our guide on how to invest in Bitcoin without buying Bitcoin.
Here, we cover three ways that you can add Bitcoin to your portfolio without needing to navigate through the complicated world of decentralized finance!
Jasmine Birtles is the founder and CEO of MoneyMagpie.com. If you’re a fan of Bitcoin, or investing generally, sign up to their free investing newsletter here.
