Bitcoin is edging closer to the significant milestone of $80,000, riding on the wave of support from President-elect Donald Trump and the growing influence of pro-crypto legislators in Congress. Over the weekend, the cryptocurrency experienced a surge, surpassing the $79,000 mark for the first time ever, leading to the closure of short positions worth $280 million across the crypto market.
Donald Trump's election as the next US president and the Federal Reserve's decision to cut interest rates by 25 basis points, both of which are viewed favorably by the crypto market.
The surge in Bitcoin prices over the weekend is commonly viewed as a bullish sign in crypto markets due to decreased trading volumes when institutional investors are less active. This lower liquidity often results in sharper price movements, where even minor trades can have a notable impact. It is suggested that the notable weekend jump might indicate that retail investors are behind the price surge, indicating broad-based interest and involvement from smaller investors rather than solely from institutional players.
Donald Trump has advocated for the US to become a leader in the digital asset arena, outlining plans to amass Bitcoin reserves and appoint regulators to supervise the industry. Bitcoin has witnessed a 90 percent increase so far in 2024, driven by strong demand for US exchange-traded funds (ETFs) and the Federal Reserve's interest rate cuts, outpacing traditional investments like stocks and gold. The contrasting stances on cryptocurrencies between Trump and current President Joe Biden are evident, with Biden's administration exercising caution towards digital assets through the Securities and Exchange Commission (SEC), headed by Gary Gensler, who has been vocal about potential fraud and misconduct in the crypto sector.