2025 looks poised for continued success in the Bitcoin (BTC) and overall cryptocurrency sector, as predicted by Pantera Capital’s recent blockchain report, with the inauguration of President-elect Donald Trump potentially leading to further market growth.
In simpler terms, Pantera’s “Year Ahead in Crypto” aimed to address concerns that the U.S. Presidential Election would be a case of ‘buying on rumors and selling after the news’ for Bitcoin.
In regular trading environments, people often follow a well-known approach: they buy an investment when there’s good gossip and sell it after the news is verified. This strategy is based on the belief that the asset’s value will increase in response to the rumored news, but then decrease once the actual news is announced.
In a similar vein, Pantera linked the election of a pro-cryptocurrency president in 2024 to the debut of spot Bitcoin exchange-traded funds (ETFs) that same month.
Approximately a year ago, Pantera held faith that the traditional saying from Wall Street wouldn’t pertain to the debut of spot Bitcoin ETFs, even though it had proven accurate when CME Bitcoin futures were first traded and Coinbase went public. The text stated this.
Based on Pantera’s perspective, the introduction of the ETFs was a situation where investors bought in anticipation (the rumor) and upon announcement (the news), as demonstrated by Bitcoin’s 100% increase in price over the past year and the collective inflows of over $40 billion into these funds.
“The US election is another “buy the rumor, buy the news” ” event, said Pantera.
The Trump catalyst
Following an impressive surge surpassing $100,000 in December, the value of Bitcoin has experienced a dip over the last month, leading some investors to anticipate a more significant decrease potentially reaching around $80,000.
In simpler terms, the recent drop in Bitcoin’s price wasn’t mainly influenced by Trump’s stance on cryptocurrencies, but more so by the Federal Reserve’s tougher stance on interest rates and their hint at a slower pace of cuts. Additionally, the rising US dollar has dampened various risky assets such as Bitcoin.
Nevertheless, some key figures in the business world anticipate that Donald Trump’s return to office following his inauguration might rekindle the upward trend in the stock market. In a podcast conversation from December, Jack Mallers, CEO of Strike, suggested that Trump could issue an executive order on his first day in office declaring Bitcoin as a reserve asset.
Simultaneously, Scott Mason, a senior policy advisor at Holland & Knight, shared with Business Insider that Donald Trump’s rise might lend credibility to cryptocurrencies like Bitcoin. This potential endorsement could potentially boost their prices.
Trump’s political selections thus far have sparked enthusiasm in the blockchain sector, as pro-cryptocurrency advocate Paul Atkins is slated to lead the Securities and Exchange Commission, while David Sacks assumes his role as the White House’s AI and digital currency advisor.
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2025-01-13 20:53