Bitcoin sets new records again 🗽Will Trump make American dream of Bitcoin come true?

1:58 PM 4 November 2024

The year 2024 belongs to Bitcoin, and investor interest in the largest of the cryptocurrencies is again on the rise, as the price rises. In the spring, Bitcoin 'reached' new all-time highs, reaching nearly $74,000. Now, after considerable declines and uncertainty over the summer, it has again approached record valuations 'on the eve' of the US presidential election, the result of which will be known on the night of November 5-6.

The sympathy that the cryptocurrency market has for Donald Trump, who is leading in the polls in the presidential race, is fueling this year's bull market. It's not surprising, since Trump himself intends to create his own 'family empire' blockchain, World Liberty Financial. As a result, Bitcoin appears to be at the mercy of the US election result. Will cryptocurrencies face a real 'revolution' if Donald Trump wins? Or has the market over-optimized around the 'Trump Trade'?

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

Bitcoin is very sensitive to the change in dynamics valued by the probability of Donald Trump winning the US presidential election. As a result of the increase in Harris' chances, since the second half of last week the price has fallen from around $73,500 to $68,000 today. Source: XTB Research, Bloomberg Finance L.P

ETF funds are not enough?

The first half of the year for Bitcoin was marked by the debut and speculation around the impact of ETFs and fourth halving. Exchange-traded funds have been steadily accumulating BTC and have sold off relatively few reserves, given Bitcoin's nearly 30% correction from its highs, in August The second half passed with the rhythm of the US presidential election. The market likes to simplify some things, and in this case sees Kamala Harris as a supporter of traditional finance, whose Democratic administration will not be particularly interested in supporting Bitcoin with additional programs or concessions for cryptocurrency companies.

However, this pessimism seems to be a considerable oversimplification. After all, it was under the Democrats that ETFs created by giants such as BlackRock and Fidelity were allowed to be traded. Ultimately, then, it is by no means obvious that Harris and the Democrats will be particularly opposed to Bitcoin. Nevertheless, the market sees the Republicans and Trump as the group that can dissolve the gift bag for Bitcoin and bring a whole new breath of fresh air to the industry, 'consolidating it' under the American flag.

The launch of ETFs in the U.S., in January of this year, resulted in net inflows of more than $23.6 billion into Bitcoin. That's about 15% more than the net inflows into the 'flagship' SPDR ETF on the S&P 500. Source: XTB Research, Bloomberg Finance L.P

The 'American dream' about Bitcoin

It's not surprising that a situation in which a (possibly) future U.S. president will be linked to the cryptocurrency market through the lens of self-interest pleases Bitcoin supporters. After all, the debut of ETFs is now just a history, and investors always have an appetite for more. As it turns out, there's plenty to fight for, as Bitcoin's 'aggressive' backing program involves the United States itself buying it... And there's no indication that Trump would have anything against the idea.

Admittedly, interest in the WLFI token, associated with World Liberty Financial and Trump's family, turned out to be lower (the project lowered its target funding by 90% from $300 million planned at the beginning to $30 million now), but the very fact that Trump has clearly identified blockchain as an alternative to traditional banking and institutions that have begun to abuse their power puts the BTC market into the party mood (Satoshi's vision rewind).

According to Axios, the world has already used approx. 44 billion dollars to secure decentralized loans (De-Fi). Against the background of the banking sector, this is still a trace amount. Trump is looking for his business opportunity here, and also expressed support for Bitcoin during a fiery speech in June, when he promised that during his reign the US would not sell any of the approximately 210,000 BTC it holds (about 1% of all BTC). Trump also criticized the U.S. for divesting some of its BTC reserves.

The first, serious steps to support Bitcoin have already been made. Republican, Cynthia Lummis presented a bill suggesting the creation of a national Bitcoin strategic reserve, the “Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act.”  Having a BTC reserve would stabilize the exponentially growing U.S. deficit, which has already reached nearly $36 trillion. 

Under the new law, the U.S. would aim to accumulate 5% of the total targeted Bitcoin supply, or about 1 million BTC. The tools that would make this possible are already available in the form of ETFs. Purchases would take place over 5 years, with a target of 200,000 BTCs accumulated each year. If we add to this puzzle the aspect of halving (decreasing supply every 4 years) and market purchases through ETFs, it's not hard to guess that the market is hoping Trump will accelerate the long term supply shock.


After a moment of weakness, following the so-called halving (limiting new BTC supply and miners' rewards by half every four years or so), Bitcoin is again showing some resemblance to historical halving highs, beginning a cyclical rise early in the fourth quarter of the year. Source: XTB Research, Bloomberg Finance L.P

Summary

The market is probably not wrong in believing that Trump's election could help 'solve the bag of new gifts' for the cryptocurrency industry. At this point, the benefits beyond solidifying the position of Bitcoin itself are difficult to quantify. Let's remember that in 2016 Trump won the election, even though polls gave him a barely 15% chance against Hillary Clinton. So this time, the markets may be wrong to underestimate Harris. 

At least in the short term, what happens to Bitcoin will depend on the outcome of the election. But will a Democratic win be seen as a big blow to the industry? Not necessarily. After all, it was during the administration of Democrat Joe Biden that Bitcoin reached new historic highs and rose from around $4,000 in March 2020 to nearly $70,000 today. 

What's more, the 'Trump Trade' is all about strengthening the dollar, consolidating inflation and increasing yields (protectionism). Historically, the macro backdrop has not been particularly favorable for Bitcoin. The arrival of 10-year yields at the magic 5% barrier may suggest significant changes in the positioning of large speculators and institutions (so-called Niederhoffer Rule). Let's also remember that Trump will not rule 'indivisibly'; in Congress, Republicans will continue to compete with Democrats.

For the moment, we know one thing. Bitcoin has taken a liking to Donald Trump, and Republicans, with his help, can create a legal framework that will help not only Bitcoin, but also the adoption of blockchain technology and other smaller cryptocurrencies. If Harris wins the election, a temporary correction may be inevitable.  

Bitcoin chart (daily interval)

Looking at the daily chart of the BTC price, we see that the price has left the medium-term downtrend price channel (March - October) after many failed attempts (red circles on the tops of the candles). Currently, it is again testing the upper limit of the mentioned price-channel, at $68,000 as support. The price has defended the 38.2 Fibonacci retracement level of the January 2024 upward wave near $50k three times, as well as EMA-200 (red line).

  • Since the local lows of August, Bitcoin has risen nearly 20%, and its capitalization again reaches $1.36 trillion, with the total capitalization of the cryptocurrency market at $2.2 trillion. A breakout above the price channel is a potential confirmation of a bullish flag formation, and if another upward impulse is triggered, a test of the area around $78k-$80k is possible. 
  • In the scenario of a win for Kamala Harris, a downward impulse may lead to a test of the $64k where there is significant support between the STHRP on-chain level and the 23.6 Fibo retracement at $62k.
  • Denominated in the euro currency, Bitcoin reached a new ATH in October, above €68k.  Bitcoin has risen more than 55% since January 1, 2024, while the Nasdaq 100, which is hitting historic peaks, has gained 21% and gold 27%. 

Source: xStation5

Eryk Szmyd Financial Markets Analyst at XTB

Share:
Back

Join over 1 000 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 25 October 2024
test_cookie cc 24 October 2024
adobe_unique_id cc 24 October 2025
__hssc cc 24 October 2024
SESSID cc 2 March 2024
__cf_bm cc 24 October 2024
intercom-id-iojaybix cc 21 July 2025
intercom-session-iojaybix cc 31 October 2024
xtbCookiesSettings cc 24 October 2025
TS5b68a4e1027
countryIsoCode
xtbLanguageSettings cc 24 October 2025
userPreviousBranchSymbol cc 24 October 2025
TS5b68a4e1027
intercom-device-id-iojaybix cc 21 July 2025
__cf_bm cc 24 October 2024
__cfruid
__cfruid
__cf_bm cc 24 October 2024
__cf_bm cc 24 October 2024
_cfuvid
adobe_unique_id cc 24 October 2025
_cfuvid
TS5b68a4e1027
xtbCookiesSettings cc 24 October 2025
SERVERID
TS5b68a4e1027
__hssc cc 24 October 2024
test_cookie cc 1 March 2024
__cf_bm cc 24 October 2024
_cfuvid
_cfuvid
__cf_bm cc 24 October 2024
__cf_bm cc 24 October 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 22 January 2025
_ga_CBPL72L2EC cc 24 October 2026
_ga cc 24 October 2026
__hstc cc 22 April 2025
__hssrc
_vwo_uuid_v2 cc 25 October 2025
_ga_TC79BEJ20L cc 24 October 2026
_vwo_uuid cc 16 October 2025
_vwo_ds cc 15 November 2024
_vwo_sn cc 16 October 2024
_vis_opt_s cc 24 January 2025
_vis_opt_test_cookie
af_id cc 23 February 2025
afUserId cc 25 January 2026
af_id cc 24 January 2026
AF_SYNC cc 1 February 2024
_ga cc 24 October 2026
_gid cc 25 October 2024
_ga_CBPL72L2EC cc 24 October 2026
__hstc cc 22 April 2025
__hssrc
_ga_TC79BEJ20L cc 24 October 2026
_gcl_au cc 22 January 2025
AnalyticsSyncHistory cc 31 March 2024

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 18 November 2025
_omappvp cc 6 October 2035
_omappvs cc 24 October 2024
_uetsid cc 25 October 2024
_uetvid cc 18 November 2025
_fbp cc 22 January 2025
fr cc 7 December 2022
_ttp cc 22 January 2025
_tt_enable_cookie cc 22 January 2025
_ttp cc 22 January 2025
hubspotutk cc 22 April 2025
IDE cc 10 November 2025
YSC
VISITOR_INFO1_LIVE cc 22 April 2025
hubspotutk cc 22 April 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 25 October 2024
_uetvid cc 18 November 2025
_ttp cc 22 January 2025
MUID cc 18 November 2025
_fbp cc 22 January 2025
_tt_enable_cookie cc 22 January 2025
_ttp cc 22 January 2025
li_sugr cc 30 May 2024
guest_id_marketing cc 24 October 2026
guest_id_ads cc 24 October 2026
guest_id cc 24 October 2026
muc_ads cc 24 October 2026
VISITOR_PRIVACY_METADATA cc 22 April 2025
MSPTC cc 18 November 2025
IDE cc 18 November 2025
MSPTC cc 18 November 2025

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
bcookie cc 24 October 2025
lidc cc 25 October 2024
UserMatchHistory cc 31 March 2024
bscookie cc 1 March 2025
li_gc cc 22 April 2025
bcookie cc 24 October 2025
li_gc cc 22 April 2025
lidc cc 25 October 2024
personalization_id cc 24 October 2026

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language