Emily Walker
The cryptocurrency market is starting to bounce back after a long phase of stagnation and price declines observed earlier this year, signaling a new era of hope.
This change has been significantly shaped by Donald Trump’s recent win against Democrat Kamala Harris, which has been paralleled by Bitcoin (BTC) achieving new all-time highs for five days straight following the election.
The Surge of Cryptocurrency Ahead
Crypto analyst Miles Deutscher shared insights on social media platform X (formerly Twitter), detailing ten essential factors he believes could lead to one of the most substantial bull runs in the cryptocurrency market in recent years.
Deutscher notes that Trump’s victory marks a crucial turning point, effectively ending what he calls “operation choke point,” which previously hindered crypto progress through restrictive regulatory measures.
With Republicans holding a majority in Congress, Deutscher argues that the chances of stringent regulatory actions are reduced. This shift could pave the way for clearer, pro-crypto regulations, potentially propelling crypto prices higher into 2025.
Moreover, he points out various macroeconomic factors that contribute to this optimistic outlook. The Federal Reserve (Fed) is anticipated to keep lowering interest rates throughout the first half of 2025.
This monetary easing often leads investors to take on riskier assets, making cryptocurrencies more appealing. In addition, global interest rate cuts are likely to enhance liquidity and support riskier investments.
Bitcoin Expected to Experience Major Growth
The current liquidity situation within the crypto market also appears quite favorable. Deutscher remarks that Bitcoin acts like a “liquidity sponge,” effectively soaking up capital entering the market.
With an unparalleled demand for BTC and a shrinking supply, he believes that conditions are set for a considerable price spike.
The supply-demand scenario for Bitcoin is particularly strong right now, with demand hitting record levels, as shown by significant inflows into Bitcoin spot exchange-traded funds (ETFs).
Additionally, wealth managers are increasingly suggesting that traditional finance clients include digital assets in their portfolios, boosting the appeal of these assets. On the supply side, Bitcoin balances on exchanges have dropped to historic lows, contributing to the scarcity that typically drives up prices.
Furthermore, the Halving event that occurred in April this year, which decreased the rate at which new Bitcoins are created, has only tightened the supply further.
As Deutscher concludes, the combination of these factors indicates a potential explosive growth for the cryptocurrency market. He suggests the market has now progressed to the third phase of the current bull cycle, noted for its steep growth patterns.
With the convergence of unique circumstances—political shifts, supportive macroeconomic policies, and favorable supply-demand dynamics—the next six months might be pivotal for the crypto sector.
Featured image from DALL-E, chart from TradingView.com.