Janice R. Andrews
Bitcoin’s upward trajectory has lost steam as markets grapple with Donald Trump’s potential presidential comeback. The cryptocurrency, which has become linked to Trump-related trading strategies, is experiencing headwinds as prediction markets show the former president gaining ground against Vice President Harris. Market conditions are further complicated by climbing bond yields and dollar strength, causing investors to reconsider expectations about Trump’s potential monetary policy impact.
The possibility of Trump’s return to office in November’s election has introduced new market dynamics. His growth-focused economic policies could significantly impact financial conditions, leading to market turbulence affecting both Bitcoin and equities. The cryptocurrency is headed for its first weekly decline in three weeks, with IG Australia Pty’s Tony Sycamore noting that tightening financial conditions due to stronger dollar and bond yields pose challenges for crypto assets.
Thursday saw Bitcoin edge up 1% to $67,416, though it still faces a 2% weekly decline. Despite this setback, the cryptocurrency has achieved remarkable growth this year, advancing roughly 60% and hitting $73,798 in March, boosted by the introduction of U.S. spot-Bitcoin ETFs.
While Trump’s pledge to establish U.S. crypto leadership offers industry optimism, it stands in stark contrast to Harris’s regulatory-focused approach, which aligns with current Biden administration policies. This policy divergence adds another layer of uncertainty, particularly as polling shows a tight race in crucial swing states.
Market observers remain divided on Bitcoin’s prospects under a potential Trump presidency. While regulatory relief seems likely, some experts, including Orbit Markets’ Caroline Mauron, warn that higher yields under Trump could pressure risk assets like Bitcoin. However, the potential benefits of looser regulation might ultimately outweigh these challenges, making Trump’s influence on Bitcoin a key market factor in the months ahead.
