Could a pro-crypto stance from a returning President Trump, combined with growing institutional adoption, push Bitcoin to a staggering $110,000? Token ATH! Token ATH! is going deep, really deep into the reasons that might help make this “perfect storm” happen for the world’s first and most popular cryptocurrency. We're cutting through the noise to deliver the insights you need to understand what's driving Bitcoin's potential next bull run.
The Trump Factor: A Friend to Crypto?
With Donald Trump likely making a return to the White House, his policies would definitely change the crypto landscape for the worse. His administration will UNDOUBTEDLY take a lighter touch toward crypto regulation, encouraging innovation and investment. This is in stark contrast to the more punitive, heavy-handed approaches that have taken hold in other jurisdictions around the world.
Pro-Crypto Policies Under Trump
If Trump wins the 2024 election, here are some potential changes to consider:
- Reduced Regulatory Burden: The aim is to streamline regulations, encouraging innovation and ensuring fair treatment of bank activities regardless of the technology involved.
- Reduced Enforcement Actions: There is potential for decreased enforcement actions against crypto companies, as indicated by the disbanding of a team of prosecutors focused on this sector.
- Favorable Regulations: The appointment of individuals like Commissioner Hester Peirce, a known advocate for regulatory clarity in the crypto space, could lead to more favorable regulations.
- Reduced Tax Paperwork: The Trump administration previously signed a law simplifying tax paperwork for decentralized finance brokers, which could further encourage crypto adoption.
These are positive shifts in policy, which will make Ohio much more hospitable to the crypto industry. This could lead to more investment and adoption of Bitcoin than ever before.
Institutional Adoption: The New Foundation
Despite facing downward pressure from repeated attempts to get above the $65,000 ceiling, bolstered by fierce institutional capital inflows Bitcoin is buoyant. This change further reflects a developing faith in Bitcoin’s longevity as a stable and trusted monetary resource. It’s shedding its speculative image and more and more is seen as a safe-haven asset like gold.
Institutional Investment on the Rise
The numbers speak for themselves: Professional investors managing over $100 million now hold $27.4 billion in Bitcoin ETFs. This is a robust 114% jump from last quarter’s $12.4 billion. This increase is a sign of real institutional player commitment.
Sovereign Wealth Funds Join the Party
Providing further validation on top of all that, sovereign wealth funds are making their way to the Bitcoin sandbox. The Emirate of Abu Dhabi has grabbed the world’s attention by revealing a $439 million Bitcoin investment. This is the first time that a sovereign wealth fund has publicly disclosed such an investment via 13-F filings. For Juthica Chou, Head of Exchange Traded Products at Kraken, institutional adoption is more than a passing fad. It’s the new baseline that will shape and inform deeper discussions of policy going forward and help produce a more sophisticated regulatory ecosystem.
Historical Context: Bitcoin's Volatile Journey
To understand Bitcoin's potential, it's crucial to examine its past performance, which has been marked by significant price swings and market-altering events.
Bitcoin's Past Cycles
- 2017 Surge: Bitcoin started 2017 slowly, hovering between $1,000 and $1,200. However, it began to climb in late April, eventually reaching over $19,000 by mid-December.
- 2020-2021 Rally: Bitcoin and Ethereum experienced a surge, driven by increased institutional interest and the rise of DeFi.
- 2022 Downturn: Bitcoin dipped below $20,000 in June 2022 for the first time since December 2020, and Ethereum fell below $1,000 for the first time since January 2021.
- Terra/Luna Collapse: The collapse of TerraUSD and Luna in May 2022 shook the market, highlighting the risks associated with stablecoins.
- Celsius Network Freeze: Celsius Network's halt of withdrawals in June 2022 further contributed to the market downturn, causing Bitcoin and Ethereum to plummet.
Together, these recent events serve as a stark reminder of the volatility that is a hallmark of the crypto market and the potential for unsafe harm.
The Path to $110K: A Perfect Storm?
Trump’s pro-crypto policies are picking up steam. At the same time, institutional adoption is increasing, paving the way for a massive Bitcoin price explosion. A number of other factors may be working to help or hurt this possible bull run as well.
Contributing Factors to a Potential Surge
- Increased Institutional Adoption: Trump's support could lead to more institutional investment, driving up demand and prices.
- Global Economic Uncertainty: In times of economic instability, investors may seek safe-haven assets like Bitcoin, potentially increasing its value.
- Regulatory Clarity: A clear and supportive regulatory stance from the Trump administration could boost confidence and encourage wider adoption.
- Dollar Value Fluctuations: Trump's economic policies could lead to fluctuations in the US dollar's value, making Bitcoin a more attractive store of value.
- Global Remittance Market: A pro-crypto stance could increase Bitcoin's use for cross-border transactions, disrupting traditional systems and driving demand.
For Bitcoin, hitting a new all‐time high of $110,000 would be a stretch. Here’s why, despite a number of complicating factors, it seems like it’s still within reach. As with any investment, assume good faith, do your own due diligence, and consult a qualified financial advisor.
