Analysts at H.C. Wainwright have noted a positive reaction in the market towards cryptocurrencies, indicating a growing confidence in the possibility of Republican presidential candidate Donald Trump winning the election. Trump’s support for Bitcoin mining in the United States has contributed to this sentiment, as he is known for his favorable stance on crypto.
The recent surge in Bitcoin and BTC mining stocks followed a failed assassination attempt on Trump during a campaign rally. Bitcoin saw a significant increase of over 9%, reaching a high of around $63,790, while mining stocks also experienced gains of approximately 10% in the following session.
Many market participants believe that the failed assassination attempt may have boosted Trump’s chances of winning the election in November. Given Trump’s reputation as a pro-crypto candidate who openly supports Bitcoin mining in the U.S., investors reacted positively to the news.
The recent uptick in Bitcoin prices can also be attributed to the end of selling pressure from the German government, which sold off its remaining 50,000 BTC seized from the Movie2k case. This move alleviated some of the downward pressure on BTC prices, with U.S. spot BTC ETFs witnessing significant inflows of over $1 billion last week.
Additionally, the market saw increased selling pressure due to the long-awaited Mt. Gox repayments. Mt. Gox, once the world’s largest Bitcoin exchange, faced a major setback in 2014 when it declared bankruptcy and revealed the loss of 850,000 BTC due to theft. The recent movement of 47,228 BTC from a Mt. Gox-associated cold wallet caused market reactions, alongside ongoing selling pressure from miners following a recent halving event that reduced mining rewards by 50%.
In the week ending July 7, Bitcoin rallied by 8.7% to $61,015, outperforming traditional equity indices. The network hash rate also increased by 2.7% to 598 EH/s, while network difficulty remained steady at 79.5T after a 5% adjustment earlier in the month. This growth in hash rate compensated for lower transaction fees, leading to a 5.2% increase in hash prices to $0.049/TH/day, surpassing the $0.05/TH/day mark for the first time in three weeks.
Overall, the market’s reaction to recent events, including the failed assassination attempt on Trump and the movements in Bitcoin prices and hash rate, reflects the growing importance of political factors in shaping the cryptocurrency landscape. Investors will continue to monitor developments closely as the election approaches and regulatory dynamics evolve.