Markets
Traders are counting on Trump cryptocurrency to boost bitcoin price
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Hello and welcome to the FT Cryptofinance newsletter. This week we look at bitcoin’s outlook for the second half of the year.
As the US presidential election draws closer, cryptocurrency traders and analysts are hoping that a Donald Trump victory in November will snap the price of bitcoin out of its recent stupor.
The cryptocurrency, a good proxy for all crypto activity, peaked in mid-March and has struggled to make headway since April’s so-called halving event, when the number of daily bitcoins available to miners to secure the Bitcoin network dropped from 900 to 450. Since then, it has fallen about 15%, and on Friday it fell below $54,000, its lowest point since February. That defied many predictions that after the halving, bitcoin would start to recover.
Analysts have suggested that the lackluster performance is due to the number of potential sales weighing on the market: $9 billion in bitcoin and bitcoin cash sales from the defunct Japanese exchange Mt Gox; possible bitcoin sales by miners; and the signal sent over the past two weeks by U.S. and German authorities, which have shifted portions of criminal seizures to cryptocurrency exchanges.
“The two authorities hold over $15 billion worth of bitcoin, which is enough potential selling pressure to make bitcoin holders nervous in the short term,” said analysts at Ryze Labs, a cryptocurrency venture capital firm.
Traders also noted the effect of Bitcoin basis trading — in which hedge funds use borrowed money to bet on the convergence of the price of Bitcoin futures and the Bitcoin spot ETF — in dampening volatility.
As the market searches for the next catalyst, there is growing talk of a “Trump trade” – a potential rally in bitcoin in the second half of the year on the prospect of a victory for the former president in November. This belief has only grown since last week’s presidential debate.
The optimism boils down to two perceptions: Trump is the most pro-crypto candidate and his policies will make assets like bitcoin more attractive to the rest of the world.
It has already shown itself to be more open to courting the industry by hosting cryptocurrencies mining industry leaders at Mar-a-Lago, accepting crypto contributions and generally making positive noises.
Industry executives are hoping that a Trump White House and strong Republican representation in Congress will mean Washington will be more willing (finally) to adopt clear, cryptocurrency-friendly regulations.
“Cryptocurrency mining companies should also benefit, particularly from Trump’s energy policy proposals, which could allow the use of alternative energy sources for bitcoin mining,” said Manuel Villegas, an analyst at Julius Baer.[President Joe] “Biden’s previous tax proposals on cryptocurrency miners, such as a 30% tax, are unlikely to be implemented under a Trump administration,” he added.
The second perception is a question that is beginning to creep into traditional finance as well: What will Trump 2.0 mean for financial markets more broadly?
The market currently expects that stricter immigration policies, more tariffs on foreign goods and tax cuts will increase the US deficit and lead to higher inflation and higher US Treasury yields.
Geoff Kendrick, an analyst at Standard Chartered, argues that Trump’s policies could create “fiscal dominance,” when a government’s deficit and debt become so large that the central bank’s main weapon, interest rate changes, have little impact.
That would affect the price of bitcoin, he said, because the cryptocurrency tends to have a reasonable correlation with some crucial U.S. Treasury indicators, such as the spread between 2- and 10-year Treasuries and breakeven rates.
A steeper curve and higher breakeven rates than real yields should push bitcoin’s price higher, he argues, as the coin acts as a good hedge against declining confidence in the U.S. Treasury market.
Trump’s odds are based in part on whether Biden will be his opponent in November. RealClearPolitics Betting Average, a composite of prediction sites, puts Trump at 55% and Biden’s odds at just 16.5%, after plunging last week.
This suggests that if Biden stays in the race, bitcoin supporters will be reinvigorated. If he withdraws and the new candidate is seen as having a chance against Trump, bitcoin could remain in the doldrums.
But that may not matter. Theories about bitcoin, whether as a hedge against inflation or an alternative to the financial system, tend to disintegrate when faced with reality.
But it doesn’t help. As Ben Hunt, chief investment officer of asset manager Second Foundation, eloquently put it: wrote This week, on his Epsilon Theory blog, “behavior changes ONLY when we think everyone believes the information.” If enough people believe Trump will win, the cryptocurrency market will move.
According to Kendrick, the most likely outcome is that by the end of July it becomes clear that Biden will run, the probability of Trump winning increases further, and bitcoin skyrockets. [high] “In August, it’s likely, then $100,000 by US Election Day.”
All markets need a narrative to sustain their momentum. But bitcoin, which has no cash flow, needs it more than most. As excess sales are cleared by the market, expect the market to strengthen over the summer.
What do you think? Email me at philip.stafford@ft.com
Highlights of the week
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Silvergate, the defunct California bank will pay $63 million to settle civil charges brought by federal and state regulators related to the bank’s collapse following the massive fraud that brought down cryptocurrency exchange FTX.
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The US Marshals Service has selected Coinbase for jail crypto assets seized as part of U.S. government criminal investigations. The agency has previously detained assets belonging to Silk Road and Mt. Gox. The five-year contract is worth $32.5 million.
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Bitcoin mining firm Genesis Digital Assets, in which trading group Alameda Research has invested $1.15 billion, is considering a U.S. IPO, Bloomberg reports reported.
Data mining: the rebound
Here’s another indicator of the slowdown in crypto markets. Centralized cryptocurrency exchanges had a strong first half, with total aggregate spot volumes up $10.6 trillion from $4.32 trillion in the second half of last year, according to CCData. March was a record month, it added. The main driver was the arrival of U.S. spot bitcoin ETFs. However, the chart also shows how the post-halving lull has affected volumes.
Cryptofinance is edited by Laurence Fletcher. To view previous editions of the newsletter, click here here.
Your comments are welcome.
Over the past 24 hours, Jupiter and JasmyCoin emerged as the top gainers among the top 100 crypto assets, while Bittensor and Mantra plunged as the top losers.
Top Winners
Jupiter
Jupiter (JUP) led the charge among the biggest gainers on July 27.
At the time of writing, the crypto asset had surged 12.6% in the past 24 hours and was trading at $1.16. JUP’s daily trading volume was hovering around $282 million, according to data from crypto.news.
JUP Hourly Price Chart, July 26-27 | Source: crypto.news
Additionally, the cryptocurrency’s market cap stood at $1.56 billion, making it the 62nd largest crypto asset, according to CoinGecko. Despite the recent price surge, the token is still down 42.6% from its all-time high of $2 reached on Jan. 31.
Jupiter functions as a decentralized exchange aggregator that allows users to trade Solana-based tokens. The platform also offers users the best routes for direct trades between multiple exchanges and liquidity pools.
In addition to being a DEX aggregator, Jupiter has expanded into a “full stack ecosystem” by launching several new projects, including a dedicated pool to support perpetual trading and plans for a stablecoin.
JasmyCoin
JasmyCoin (JASMI) has increased by 12% in the last 24 hours and is trading at $0.0328 at press time. JASMY’s daily trading volume has increased by 10% in the last 24 hours, reaching $146 million.
JASMY Hourly Price Chart, July 26-27 | Source: crypto.news
The asset’s market cap has surpassed the $1.5 billion mark, making it the 60th largest cryptocurrency at the time of reporting. However, the self-proclaimed “Bitcoin of Japan” is still down 99.3% from its all-time high of $4.79 on February 16, 2021.
JASMY is the native token of Jasmy Corporation, a Japanese Internet of Things provider. The platform seeks to merge the decentralization of blockchain technology with IoT, allowing users to convert their digital information into digital assets.
The initiative was launched by Kunitake Ando, former COO of Sony Corporation, along with Kazumasa Sato, former CEO of Sony Style.com Japan Inc., Hiroshi Harada, executive financial analyst at KPMG, and other senior executives from Japan.
Kaspa
Kaspa (KAS) saw a 100% increase in trading volume and an 8% increase in price over the past 24 hours, trading at $0.19 at the time of publication.
KAS Hourly Price Chart, July 26-27 | Source: crypto.news
According to data from CoinGecko, Kaspa now ranks 27th in the global cryptocurrency list, with a circulating supply of approximately 24.29 billion KAS tokens and a market capitalization of $4.59 billion.
Kaspa is a cryptocurrency designed to deliver a high-performance, scalable, and secure blockchain platform. Its unique Layer-1 protocol includes the GhostDAG protocol, a proof-of-work (PoW) consensus mechanism that enables faster block times and higher transaction throughput compared to standard blockchains.
Unlike Bitcoin, GhostDAG allows multiple blocks to be created simultaneously, speeding up transactions and increasing block rewards for miners.
Bonk
Bonk (BONK) is the only one coin meme which made it to this list of biggest gainers and jumped 8.6% in the last 24 hours. Trading at $0.000030, the Solana-based meme coin’s market cap has surpassed $2.1 billion, surpassing Floki (FLOKI), another competing dog-themed coin with a market cap of $1.78 billion.
BONK Hourly Price Chart, July 26-27 | Source: crypto.news
BONK’s daily trading volume hovered around $285 million. However, BONK is still down 33.5% from its all-time high of $0.000045, reached on March 4.
Bonk, a meme coin that rose to prominence in 2023, has contributed significantly to Solana’s value increase amid the meme coin frenzy.
Bonk started out as a simple dog-themed coin. It has since expanded its features to include integration with decentralized finance. The project also partners with cross-chain communication protocols, NFT marketplaces, and various other cryptocurrency ecosystems.
BONK trading pairs are now listed on major exchanges including Binance, Coinbase, OKX, and Bitstamp.
The big losers
Bittensor
Bittensor (TAO) was the biggest loser among the 100 largest crypto assets, according to data from CoinGecko.
At the time of writing, TAO, the native token of decentralized AI project Bittensor, was down 5%, trading around $344. The crypto asset had a daily trading volume of $59 million and a market cap of $2.43 billion.
TAO 24 Hour Price Chart | Source: CoinGecko
Bittensor, created in 2019 by AI researchers Ala Shaabana and Jacob Steeves, initially operated as a parachain on Polkadot before transitioning to its own layer-1 blockchain in March 2023.
Mantra
Mantra (OM) fell 6%, trading at $1.13 at press time. The digital currency’s market cap fell to $938 million. Additionally, the 82nd largest crypto asset has a daily trading volume of $26 million.
OM Price Hourly Chart, July 26-27 | Source: crypto.news
Mantra is a modular blockchain network comprising two chains, Manta Pacific and Manta Atlantic, specialized in zero-knowledge applications.
Coat
Coat (MNT) also saw a 2.4% drop in price, now trading at $0.8413. Currently, Mantle has a market cap of around $2.75 billion, which ranks 36th in the global cryptocurrency rankings by market cap, according to price data from crypto.news.
MNT Hourly Price Chart, July 26-27 | Source: crypto.news
Over the past 24 hours, MNT trading volume also fell by 6%, reaching $240 million.
Mantle, formerly known as BitDAO, is an investment DAO closely associated with Bybit. The MNT token is essential for governance, paying gas fees on the Mantle network, and staking on various platforms.
Built on the Ethereum network, Mantle provides a platform for decentralized application developers to launch their projects. It has become particularly popular for GameFi applications, leading to the formation of an internal Web3 gaming team.
Markets
Bitcoin Price Drops to $67,000 Despite Trump’s Pro-Crypto Comments, Further Correction Ahead?
Pioneer cryptocurrency Bitcoin has registered a 1.13% decline in the past 24 hours to trade at $67,400. Despite a strong pro-crypto stance from US presidential candidate Donald Trump at the Bitcoin 2024 conference, this massive selloff has raised concerns in the market about the asset’s sustainability at a higher price. However, given the recent three-week rally, a slight pullback this weekend is justifiable and necessary to regain the depleted bullish momentum.
Bitcoin Price Flag Formation Hints at Opportunity to Break Beyond $80,000
The medium-term trend Bitcoin Price remains a sideways trend amidst the formation of a bullish flag pattern. This chart pattern is defined by two descending lines that are currently shaping the price trajectory by providing dynamic resistance and support.
On July 5, BTC saw a bullish reversal from the flag pattern at $53,485, increasing its asset by 29.75% to a high of $69,400. This recent spike followed the market’s positive sentiment towards the Donald Trump speech at the Bitcoin 2024 conference in Nashville on Saturday afternoon.
Bitcoin Price | Tradingview
In his speech, Trump outlined several pro-crypto initiatives: he promised to replace SEC Chairman Gary Gensler on his first day in office, to establish a Strategic National Reserve of Bitcoin if elected, to ensure that the U.S. government holds all of its assets. Bitcoin assets and block any attempt to create a central bank digital currency (CBDC) during his presidency.
He also claimed that under his leadership, Bitcoin and cryptocurrencies will skyrocket like never before.
Despite Donald Trump’s optimistic promises, the BTC price failed to reach $70,000 and is currently trading at $67,400. As a result, Bitcoin’s market cap has dipped slightly to hover at $1.335 trillion.
However, this pullback is justified, as Bitcoin price has recently seen significant growth over the past three weeks, which has significantly improved market sentiment. Thus, price action over the weekend could replenish the depleted bullish momentum, potentially strengthening an attempt to break out from the flag pattern at $70,130.
A successful breakout will signal the continuation of the uptrend and extend the Bitcoin price forecast target at $78,000, followed by $84,000.
On the other hand, if the supply pressure on the upper trendline persists, the asset price could trigger further corrections for a few weeks or months.
Technical indicator:
- Pivot levels: The traditional pivot indicator suggests that the price pullback could see immediate support at $64,400, followed by a correction floor at $56,700.
- Moving average convergence-divergence: A bullish crossover state between the MACD (blue) and the signal (orange) ensure that the recovery dynamics are intact.
Related Articles
Frequently Asked Questions
A CBDC is a digital form of fiat currency issued and regulated by a country’s central bank. It aims to provide a digital alternative to traditional banknotes.
The proposal for a strategic national Bitcoin reserve is a major confirmation of Bitcoin’s legitimacy and potential as a reserve asset. Such a move could position Bitcoin in a similar way to gold, potentially stabilizing its price and encouraging other countries to adopt similar strategies.
Conferences like Bitcoin 2024 serve as essential platforms for networking, knowledge sharing, and showcasing new technologies within the cryptocurrency industry.
Markets
Swiss crypto bank Sygnum reports profitability after surge in first-half trading volumes – DL News
- Sygnum says it has reached profitability after increasing transaction volumes.
- The Swiss crypto bank does not disclose specific profit figures.
Sygnum, a Swiss global crypto banking group with approximately $4.5 billion in client assets, announced that it has achieved profitability after a strong first half, with key metrics showing year-to-date growth.
The company said in a Press release Compared to the same period last year, cryptocurrency spot trading volumes doubled, cryptocurrency derivatives trading increased by 500%, and lending volumes increased by 360%. The exact figures for the first half of the year were not disclosed.
Sygnum said its staking service has also grown, with the percentage of Ethereum staked by customers increasing to 42%. For institutional clients, staking Ethereum has a benefit that goes beyond the limitations of the ETF framework, which excludes staking returns, Sygnum noted.
“The approval and launch of Bitcoin and Ethereum ETFs was a turning point for the crypto industry this year, leading to a major increase in demand for trusted, regulated exposure to digital assets,” said Martin Burgherr, Chief Client Officer of Sygnum.
He added: “This is also reflected in Sygnum’s own growth, with our core business segments recording significant year-to-date growth in the first half of the year.”
Sygnum, which has also been licensed in Luxembourg since 2022, plans to expand into European and Asian markets, the statement said.
Markets
Former White House official Anthony Scaramucci says cryptocurrency bull market could be sparked by regulatory clarity
Anthony Scaramucci, founder of Skybridge Capital, says the next cryptocurrency bull market could be sparked by a new wave of clear cryptocurrency regulations.
In a new interview On CNBC’s Squawk Box, the former White House communications director said he and two other prominent industry figures traveled to Washington, D.C. to speak to officials about the dangers of Sen. Elizabeth Warren and U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s hardline approach to cryptocurrency regulation.
“Mark Cuban, myself, and Michael Novogratz were in Washington a few weeks ago to speak with White House officials and explain the dangers of Gary Gensler and Elizabeth Warren’s anti-crypto approach. I hope that message gets through…
“Overall, if we can get regulatory policy around Bitcoin and crypto assets in sync, we will have a bull market next year for these assets.”
Scaramucci then compares crypto assets to ride-hailing company Uber, saying regulators were initially wary of the service but eventually decided to adopt clear guidelines due to public demand.
“Remember Uber: Nobody wanted Uber. A lot of regulators didn’t want it. Mayors and deputy mayors didn’t want it, but citizens wanted Uber and eventually accepted the idea of regulating it fairly. I think we’re there now.”
The CEO also says young Democratic voters believe their leaders are making the wrong choices when it comes to digital assets.
“I think President Trump’s move toward Bitcoin and crypto assets has shaken Democrats to their core, and I think very smart, younger Democrats are recognizing that they are completely off base with their positions, completely off base with these SEC lawsuits and regulation by law enforcement, and now they need to get back to the center.”
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