Why is Bitcoin’s Price Skyrocketing? Analyst Explains Three Reasons and Predicts What’s Next
Bitcoin’s price has surged, approaching its all-time high of $72,000. Analysts attribute this rally to three main factors and anticipate further price volatility.
Election Sentiment and the Trump Factor
According to Carlos Guzman, an analyst at GSR, investor sentiment surrounding the upcoming US elections is a significant driver. Guzman suggests that Bitcoin prices are rising in the short term due to Donald Trump’s pro-crypto stance. In May, Trump expressed his support for cryptocurrencies, stating, “If you’re for crypto, you better vote for Trump.” Furthermore, his campaign has accepted crypto donations. In contrast, Vice President Kamala Harris has taken a more cautious approach to digital assets, offering limited details on her stance toward crypto.
Middle East Geopolitical Developments
Geopolitical tensions in the Middle East are also influencing Bitcoin’s trajectory. Guzman highlights the recent de-escalation of tensions following Israel’s limited military intervention against Iran. Initially, investors withdrew from risky assets, including cryptocurrencies, due to fears of a broader conflict. However, Iran’s statement last week expressing its intent to avoid escalating tensions and Israel’s confirmation of limited retaliation have helped alleviate market concerns. Pentagon deputy press secretary Sabrina Singh stated, “This has to be the end of tit-for-tat” during a briefing on Monday.
ETF Inflows Are Increasing
The third driving force behind Bitcoin’s recent rally is the growing investment inflow into spot Bitcoin ETFs. Guzman notes that these ETFs have witnessed the highest net inflows in the past two weeks, indicating renewed bullish sentiment among institutional investors. Bitwise CIO Matt Hougan confirms this trend, revealing that Bitcoin ETFs have received $3 billion in inflows in the past two weeks alone. With election sentiment, easing geopolitical tensions, and strong ETF inflows playing a significant role, analysts predict increased volatility in Bitcoin’s price as it approaches a potential new record.
As the US elections draw near and geopolitical tensions remain volatile, Bitcoin’s rally could gain momentum driven by market sentiment and increased institutional participation through ETFs, predicts Guzman.
*This article does not provide investment advice.
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