Bitcoin set for record high amid US election and rate cuts

Bitcoin is poised for a potential surge to a new record high this month, driven by expectations of further US policy rate cuts and a potential victory by Donald Trump in the US presidential election, according to insights from Merkle Capital, a digital asset fund manager.

Last month, Bitcoin reached US$73,600, marking an increase of over 25% compared to the previous year. This milestone comes as investors anticipate the US Federal Reserve will implement two more policy rate cuts before the end of the year.

Additionally, speculation surrounds a possible win for the Republican Party in the US election, said Woramet Chansen, an investment advisor at Merkle Capital.

“Bitcoin and all cryptocurrencies, especially those within the Ethereum ecosystem, are expected to see significant growth this month.

“The US presidential election plays a crucial role in shaping the investment landscape until 2028.”

The US election influences digital asset investments through both direct and indirect channels, particularly due to the differing policies of the political parties, added Woramet. The Republican Party, and Trump in particular, have publicly expressed support for the cryptocurrency market.

Bitcoin surge

The potential for a Trump victory has prompted Bitcoin prices to test their all-time high levels. This market movement, while initially short-term, is viewed as beneficial for the coming four years, Woramet said.

Merkle Capital reported that institutional investors increased their Bitcoin investments by over US$2.8 billion last month, reflecting a growing acceptance of risk and confidence in cryptocurrency.

“Should events unfold as anticipated, the crypto market could see heightened interest from institutional investors in the future.”

Furthermore, Farside.co.uk highlighted a 13% rise in Ethereum prices this month, with the Ethereum spot exchange-traded fund witnessing a surge of over 30%, largely driven by institutional investors. This trend underscores growing confidence among institutional players and presents an opportunity for the Ethereum ecosystem to expand both in the short term and long term, according to the site’s analysis.

Mana Khanijou, the chief commercial officer at Merkle Capital, expressed optimism about digital asset investments for the remainder of the year, reported Bangkok Post.

“Bitcoin prices rose in October and November, and the upward trend is expected to continue through the last two months of the year.”

Economic developments such as the US election and the ongoing interest rate downtrend are key factors to watch, Mana said.

“During this time, investors might experience FOMO [fear of missing out], leading to increased buying activity. It is important to manage finances wisely and remain cautious of potential market profit-taking.”