The cryptocurrency market is buzzing with anticipation. Bitcoin (BTC) is steadily climbing towards its all-time high, and some experts are predicting new records. Jamie Coutts from Real Vision forecasts that Bitcoin could reach USD 110,000, driven by an expanding global money supply and political factors, such as the potential return of Donald Trump to the White House. Could Trump’s comeback catalyse Bitcoin’s surge? Let’s explore how political and economic factors are shaping Bitcoin’s future.
Global Money Supply: Fuelling Bitcoin’s Rise
A major driver of Bitcoin’s recent ascent is the expanding global money supply. With international money nearing USD 500 trillion, investors are increasingly seeking ways to preserve value amidst potential currency debasement. Bitcoin, with its fixed supply of 21 million, is emerging as a preferred option. Jamie Coutts suggests that as more fiat enters the financial system, Bitcoin will be seen as a stable, scarce asset, potentially driving its price to USD 110,000 by 2025.
Additionally, Bitcoin’s open interest, which measures the total number of unsettled futures contracts, recently hit USD 20 billion, indicating strong investor confidence. Rising open interest often correlates with price rallies, as traders bet on future gains.
Another key factor is the possibility of a supply shock. Bitcoin reserves on exchanges have dropped to a six-year low, indicating that more investors are moving BTC into private wallets, a sign of intent to hold rather than sell. This reduces available supply, which could lead to a supply shock, driving prices even higher.
Crypto analyst Crypto Rover points out that the decline in exchange reserves indicates increasing demand for Bitcoin as a store of value, potentially heralding a significant price increase.
The Trump Factor: Political Impact On Bitcoin
Politics also plays a significant role in Bitcoin’s current momentum. As the 2024 US presidential election approaches, Donald Trump’s rising chances of a return to power have added to market enthusiasm. According to Polymarket data, Trump’s odds of winning are currently at 60.3%. But why does Trump matter for Bitcoin?
Donald Trump has recently shifted toward a more favourable stance on cryptocurrencies, a move seen positively by the crypto community. While his stance during his last term fluctuated, current signals suggest he may adopt a more crypto-friendly regulatory approach if re-elected. A Trump presidency could lead to lighter US regulations, potentially boosting Bitcoin adoption at institutional and retail levels.
The prospect of a Trump-led administration has already led firms like Matrixport to revise their Bitcoin price predictions upwards from USD 70,000. A Trump presidency could indeed catalyse another strong bullish phase for Bitcoin.
Trump’s Financial Views And Bitcoin Decentralisation
Donald Trump has frequently criticised the United States Federal Reserve and centralised banking power, aligning with Bitcoin’s ethos of decentralisation. If Trump’s policies reduce the Federal Reserve’s influence, Bitcoin could be further empowered as a tool for financial sovereignty. This alignment is one reason why the crypto community is closely monitoring US political developments.
Bitcoin’s price movements often correlate with major political events like the US elections. Historically, Bitcoin tends to rally following elections, which has led to renewed optimism within the crypto community about Donald Trump’s potential return. Many remember the gains seen during his previous tenure.
However, QCP Capital has warned that while Bitcoin’s fundamentals are strong, the next all-time high may not occur until early 2025, after the election-related volatility subsides. This means that Bitcoin’s surge to USD 110,000 could be more a matter of timing than certainty.
Investor Considerations
For investors, Bitcoin’s potential rally presents a unique opportunity. Rising demand, driven by an expanding money supply and decreasing exchange reserves, points to increasing scarcity. A supportive political environment, particularly under Trump, could provide the momentum Bitcoin needs for its next leap.
Though the crypto market is known for volatility, and the upcoming political events add further uncertainty, those who navigate these fluctuations may be rewarded handsomely. Considering the economic, supply, and political dynamics, Coutts’ USD 110,000 forecast is not out of reach.
Bitcoin finds itself at the intersection of multiple powerful influences, rising global money supply, a potential supply shock, and Donald Trump’s possible return to the presidency. These factors could combine to propel Bitcoin to new all-time highs.
While the timing of Bitcoin reaching USD 110,000 remains uncertain, it increasingly seems a matter of “when” rather than “if.” As the 2024 United States election approaches, the interplay between Trump’s political fortunes and Bitcoin will be pivotal. Investors should closely monitor economic and political trends, as they will likely shape Bitcoin’s future trajectory.