Bernstein Analysis: Bitcoin Unfazed by Potential Trump Victory in Regulatory Shift

• The cryptocurrency market has not yet factored in the potential positive regulatory changes if Republican candidate Donald Trump wins the U.S. presidential election, according to Bernstein analysts.
• Analysts note that Bitcoin’s price has positively responded to perceived improvements in Republicans’ winning prospects.
• Trump’s pro-crypto stance is believed to bolster Bitcoin, despite certain on-chain metrics remaining in the ‘red zone’.

Discover how the cryptocurrency market could be influenced by a potential Trump presidency and what it means for Bitcoin’s future.

Bitcoin’s Reaction to Republican Gains

Research and brokerage firm Bernstein has highlighted that the market has not yet priced in the potential regulatory benefits if Donald Trump wins the U.S. presidential election. Analysts Gautam Chhugani and Mahika Sapra argue that Bitcoin has shown a positive reaction to increased probabilities of a Republican win. They believe in Trump’s pro-crypto stance ahead of his Bitcoin 2024 speech scheduled for July 27 in Nashville.

Institutional Investors and Market Movements

Analysts have identified a significant gap in the allocation of crypto assets and stocks by institutional investors. Over the past week, Bitcoin saw an 8% increase, trading at $67,817. Net inflows have exceeded $2 billion in the last two weeks, pushing total inflows since January’s launches to over $17 billion. Total assets under management have reached $60 billion, signaling the return of Bitcoin ETF momentum.

Technological and Market Stability of Bitcoin

Despite facing numerous challenges, Bitcoin continues to demonstrate remarkable technological stability, having operated for the past 15 years without major disruptions. This stability, coupled with potential monetary growth, positions Bitcoin favorably in the mid-term. Currently, Bitcoin’s market-type score stands at 7, significantly lower than the 52-week average of 41, reflecting a relatively stable market environment when compared to the previous year’s volatility.

Low Market Risk and Improving Momentum

The market risk indicator recently fell to zero, a significant drop from last week’s high-risk score of 50 and well below the 52-week average of 22. This suggests that Bitcoin is increasingly being seen as a safer investment option. While the price momentum metric remains negative at -24, it has improved from the previous week’s score of -60. Although the 52-week average is 18, the improving momentum metric indicates potential for a positively dynamic shift.

Conclusion

In summary, the current market landscape shows a cautiously optimistic outlook for Bitcoin, fueled by the possibility of favorable regulatory changes if Trump wins the election. The technological stability of Bitcoin continues to attract investors, while its status as a safer investment is gaining traction. The coming weeks will be crucial in determining whether these developments translate into sustained positive momentum for BTC.