Coin World Network reports:
Late Tuesday to early Wednesday, the “Trump trade” became the focal point as Bitcoin hit a new all-time high and cryptocurrency prices soared, buoyed by early signs that the Republican Party might return to the White House.
Bitcoin’s surge was driven by the market beginning to price in the possibility of former President Donald Trump winning on election day, with key swing states completing their voting sooner than many had predicted.
According to TradingView’s crypto index, Bitcoin posted its largest single-day performance since March 20, rising 9% to close above $75,560 on Wednesday.
Some suggest that despite the market’s eagerness for a rebound next week, the Federal Open Market Committee’s decision on Friday to lower or maintain the funds rate is unlikely to boost prices.
David Lawant, Head of Research at FalconX, stated, “This decision is inconsequential.”
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“But as we move into 2025 during Trump’s presidency, there is significant macroeconomic uncertainty.”
Instead, Lawant pointed to the uncertainty surrounding Trump’s proposed tariffs and their impact on cryptocurrencies, as well as the fiscal and monetary policy decisions the former president might make in a second term.
However, not everyone agrees with Lawant’s perspective.
Pav Hundal, Chief Market Analyst at cryptocurrency exchange Swyftx, stated
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The Federal Reserve’s decision “is more likely to be a bigger deal for Bitcoin than the U.S. election outcome.”
Lower interest rates reduce borrowing costs, increase consumer spending, and diminish the appeal of traditionally safer investments like bonds, prompting investors to turn to riskier assets for higher returns.
Hundal commented, “The market has already shifted back towards Bitcoin.” “A rate cut of 25 basis points or more will only accelerate this process, making it more likely for Bitcoin’s price to reach six figures by the end of the year.”
As investors seek better growth opportunities in a low-interest-rate environment, changes in rates often boost the demand and valuation for stocks and cryptocurrencies.
Hundal added, “The FOMO in the market right now is FOMO on top of FOMO.” “We saw a clear accumulation trend immediately after the last rate cut, so it’s safe to say a 0.25% cut will be very positively received.”