2024-11-07 09:48

Under the proposal, bitcoin would be established as a strategic reserve asset and the government could buy up to 5% of the cryptocurrency's total supply, the report said. Passing the Bitcoin Act would be a massive tailwind for the industry, the report said. CoinShares said the bill, if adopted, would give bitcoin a similar reserve status as gold. The passage of such legislation would lead to significant governmental and institutional interest in bitcoin, the asset manager said. Donald Trump's administration is likely to provide a more positive environment for cryptocurrencies, and one of the most anticipated developments is the possible adoption of the Bitcoin Act, asset manager CoinShares said in a research blog Wednesday. "This proposal would establish bitcoin as a strategic reserve asset, with the U.S. government acquiring up to 5% of bitcoin's total supply," wrote James Butterfill, head of research at CoinShares. That would give bitcoin (BTC), the original cryptocurrency, a similar role to gold. With a recognized position within the national reserve, it would also gain greater legitimacy, the report said. U.S. Sen. Cynthia Lummis (R-Wyo.) introduced legislation earlier this year calling for the establishment of a strategic bitcoin reserve to reduce the country's national debt by buying 1 million BTC over five years. The bill, entitled Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, was introduced to the Senate in July. President-elect Trump promised to establish a bitcoin reserve in the run-up to the election, and Lummis reiterated the plan on X following his victory. "If implemented, the Bitcoin Act could drive considerable institutional and governmental interest in bitcoin, potentially accelerating its growth and pushing its value to new heights," Butterfill wrote. CoinShares noted that Trump has been a critic of the Securities and Exchange Commission (SEC) and Gary Gensler, its chairman, particularly in regard to the agency's approach to crypto. His administration is expected to appoint new SEC leaders, which could lead to a period of more crypto-friendly regulation. Broker Canacccord said that "changes in the SEC posture, along with the passage of a crypto-industry regulatory framework," could lead to much wider adoption of digital assets by the mainstream financial services industry. The broker noted that while the president can't fire an SEC commissioner, a reshuffle is possible, and one more crypto-friendly replacement would be Hester Peirce, it said in a research report on Wednesday. If these changes were to happen at the SEC, it would benefit the whole industry, and in particular Coinbase (COIN) and Galaxy Digital (GLXY), Canacccord said. https://www.coindesk.com/policy/2024/11/07/trumps-biggest-boon-to-crypto-would-be-passing-the-bitcoin-act-coinshares/

2024-11-07 06:36

The bullish sentiment comes from Trump's promise to make the U.S. a leading hub for cryptocurrency during his campaigns, which might translate into more favorable regulations for DeFi. Ether saw a 10% increase in the last 24 hours, reaching over $2,800, while other cryptocurrencies experienced profit-taking. This surge is linked to optimism around DeFi following Trump's presidential win, where expectations of pro-crypto policies and deregulation are boosting investor confidence. Trump’s potential policies might ease regulatory burdens, allowing DeFi projects more freedom and possibly recognizing tokens as commodities, which could enhance the sector's growth and innovation. Ether (ETH) crossed $2,800 for the first time since early August, breaking out of rangebound trading that saw prices stuck between $2,300 and $2,600 levels despite a breakout in bitcoin (BTC). A ratio tracking the performance of the two majors slid to April 2021 levels on Tuesday — indicative of a fallout in investor demand for ETH. But President-elect Donald Trump’s victory is bringing back hopes of a decentralized finance (DeFi) bull market, at least among some investors, and with it demand for ETH. “DeFi Renaissance thesis is progressing as expected with Trump deregulation and crypto friendly policy and rule-making from Republican admin and Senate,” wrote Arthur Cheong, co-founder at DeFiance Capital, in an X post. “Elon gonna help usher in the golden age of innovation and capitalism.” In early October, Cheong published a viral thesis on why DeFi applications could see a bump in user base and token demand after a disappointing few years — pointing to growing activity metrics and an increase in new money flowing into DeFi projects. “In fact, some foundational DeFi projects, like Aave, have even surpassed their 2022 peak in several metrics. Aave’s quarterly revenue has surpassed that of 4Q21 — considered the height of the last bull market,” Cheong said. “This signals that DeFi is maturing and entering a new phase of productivity, poised for long-term scalability.” The bullish sentiment comes from Trump's promise to make the U.S. a leading hub for cryptocurrency during his campaigns, which might translate into more favorable regulations for DeFi. The campaign indicated a move toward reducing the regulatory burden on crypto, potentially making it easier for DeFi platforms to operate within the U.S. This could involve clearer guidelines for token offerings, possibly recognizing certain tokens as commodities rather than securities under SEC oversight. “Imagine the next 4 years being the complete opposite of the last few years when it comes to what DeFi projects are "allowed" to do,” said Ethereum educator @sassal0x in an X post. “Fee switches, fee switches everywhere!” Some even point out the Trump family’s backing of World Liberty Financial as a key reason for the market sentiment. Traders are already reacting favorably to Trump's presidency. Mindshare - a tracker of social media sentiment on X - for DeFi is leading among other trending sectors such as AI and memecoins in the past 24 hours, per Kaito data. Various DeFi indexes tracking the prices of major projects are up 22% on average in the past 24 hours, CoinGecko data shows, while majors tracked by the broad-based CoinDesk 20 are up 3.4% in the period. https://www.coindesk.com/markets/2024/11/07/ether-surges-10-as-trump-victory-brings-back-defi-bullishness/

2024-11-07 05:25

A 25-basis point Fed rate cut will likely be a non-event, and markets will be interested in what Powell thinks of President-elect Donald Trump's inflationary policy cocktail of loose fiscal policy and import tariffs. Thursday's expected 25 basis point Fed rate cut is likely to be a non-event. Powell's response to questions on President-elect Donald Trump's inflationary policy stance will likely move markets. For bitcoin (BTC) traders, Thursday's Federal Reserve (Fed) rate decision will primarily focus on the central bank's commentary, especially concerning the anticipated inflationary effects of President-elect Donald Trump's promised policies, rather than the decision itself, which seems to be priced in. Background In September, the Fed delivered an outsized 50 basis points (bps) rate cut, kicking off the so-called liquidity easing cycle in a positive development for risk assets, including cryptocurrencies. The Fed funds futures show expectations for a quarter-point rate cut on Thursday and a similar move in December, followed by a pause in January and multiple cuts through 2025. The current target range of 4.75% to 5% for the Fed funds rate (benchmark borrowing cost) is well above the "neutral" level, estimated between 3%-3.5%. The consensus, therefore, is that the Fed has plenty of room to normalize the overly tight monetary policy with rate cuts, more so since the labor market cooled significantly in October. The neutral level is the one where interest rates are neither restrictive nor expansionary. Thursday's rate cut priced in The CME's FedWatch tool shows traders assigning a nearly 100% chance of the Fed reducing the benchmark interest rate range to the 4.5%-4.7% range Thursday. In other words, the 25 bps rate cut is already priced in and, by itself, could be a non-event. Comments on Trump's tariffs plan The cooling of inflation in the U.S. this year has redirected the Fed's focus on supporting the labor market by normalizing what has been an overtly restrictive monetary policy. However, Republican candidate Donald Trump's victory in Tuesday's presidential election might disrupt these plans and the market would love to hear what the Fed Chairman Jerome Powell thinks of it. Trump has already secured the Senate, and potential control of the House will boost his ability to enact his poll promises – tax cuts and loose fiscal policy while implementing high import tariffs on major trading partners like China and Mexico. The economic plan will likely underpin inflation, potentially forcing the Fed to keep rates elevated. During the post-rate decision press conference, Powell is likely to get questions about the election and possible inflation resurgence under Trump. Bitcoin and other risk assets may see downside volatility if Powell expresses concerns about Trump's proposed policies, forcing markets to reassess expectations for rate cuts in the coming months. The BTC rally will likely continue if Powell avoids commenting on the matter, reiterating the data-dependent stance. BTC jumped to record highs above $75,000 Wednesday in hopes of friendlier regulatory policies under Trump presidency. Fed to err on the side of caution After misjudging the coronavirus-induced supply-push inflation as transitory in 2021, there is a strong possibility of the Fed slowing down its normalization in anticipation of large tariff increases. "We think policymakers could err on the side of the caution by pausing the cutting cycle if large tariff increases are announced, Bank of America's global research team said in a note to clients Tuesday. "All else equal, we think further fiscal expansion means a higher terminal fed funds rate," the research team added. https://www.coindesk.com/markets/2024/11/07/bitcoin-fed-preview-powells-take-on-trump-tariffs-eyed-amid-anticipated-25bps-fed-rate-cut/

2024-11-07 03:18

Analysts expect a 0.25% rate cut this week, which has historically benefited assets like BTC by diluting the dollar's value and pushing investors towards alternative investments. Bitcoin hit a new all-time high of $76,000 following Donald Trump's election victory, reflecting a bullish market sentiment. The market anticipates a 0.25% Federal Reserve rate cut, which typically supports risk assets like Bitcoin by increasing liquidity and weakening the dollar. Traders are closely watching the Federal Reserve's next moves, particularly any signals from Fed Chair Jerome Powell's comments. There's a mixed outlook with concerns about potential hawkish policies dampening market enthusiasm. Bitcoin (BTC) surged to a new all-time high of $76,000 late Wednesday following Republican Donald Trump’s win at the U.S. elections, ushering in a widely expected bullish era for the crypto sector. BTC added 6.6% in the past 24 hours, CoinGecko data shows, extending 30-day gains to over 21% and more than doubling in value over the past year. Strength in BTC saw everything from dog-themed tokens to those of decentralized exchanges zooming more than 10% — mirroring a stock and bond market rally that’s quickly being described as the “Trump trade.” “BTC has now navigated three election cycles since its inception in 2009, each followed by rallies to new highs, with prices never dipping back to pre-election levels,” QCP Capital traders said in a Telegram broadcast late Tuesday. “The dollar surged 1.2% to reach July highs of 105, with yields also climbing as markets anticipate stronger economic growth and increased fiscal spending.” “We expect this bullish momentum to hold strong as we head into 2025,” QCP added. But now that Trump has been elected to office, what’s next for the markets in the short term? Traders are quickly turning their eyes to the next round of Federal Reserve rate cuts scheduled for later Thursday. A pivot to lower borrowing costs has historically buoyed bullish sentiment among traders as cheap access to money spurts growth in riskier sectors. Analysts expect a 0.25% rate cut this week, which has historically benefited assets like BTC by diluting the dollar's value and pushing investors towards alternative investments. There’s a 97% chance for a 25 bps cut on Polymarket, with 1% for 50 bps and even lower for higher. “A 25bps rate cut is widely anticipated, with the market pricing in a 96.8% probability of such a move (according to FedWatch),” shared Min Jung, research analyst at Presto Research, in a note to CoinDesk. “However, the rates market has been signaling uncertainty, evidenced by the benchmark 10-year Treasury yield climbing to 4.48%, its highest level over four months.” “This increase reflects expectations that a Trump election win could lead to higher deficits and inflation. Therefore, attention will be focused on Powell’s press conference for insights, particularly since November does not include a Summary of Economic Projections (SEP) update,” Min added. Some consider hedging bets if Fed chair Jerome Powell’s speech gives bearish signals. “A hawkish tilt on Thursday's FOMC would be an unwelcome development for the market, but an insistence on staying on the current dovish path would also risk a potential yield tantrum as bond buyers go on a buyer's strike into year-end,” Augustine Fan, dead of Insights at SOFA, told CoinDesk in a Telegram chat. “Furthermore, with China likely to respond with a more aggressive easing policy in light of the tariff-heavy policies from Trump, there appears to be no end to bond supply and we fear that the move higher in USD FX and yields could be a significant risk-dampener at some point,” Fan added. As such, there’s also attention on another stimulus package out of China, which tended to influence bitcoin prices despite cryptocurrency trading being illegal in the country. China's potential easing policies in response to US tariffs could introduce volatility, particularly affecting the dollar's strength and yield movements. Meanwhile, some traders don’t foresee additional rate cuts in the Trump administration. “Despite expectations for a decrease in rate cut probabilities due to Trump’s "friendlier" proposed policies, the market is still pricing in 1.8 cuts this year and 3 more cuts next year,” QCP said in its Wednesday note. https://www.coindesk.com/markets/2024/11/07/what-next-for-bitcoin-after-trump-win-traders-look-to-fed-rate-cuts-for-bullish-btc-move/

2024-11-06 22:01

Crypto exchange Coinbase's shares closed the day 31% higher, leading gains among digital asset-related stocks. Crypto assets kept climbing higher Wednesday after Donald Trump won the U.S. presidency, with bitcoin (BTC) blasting through $76,000 for the first time ever amid optimism the election will usher in a far friendlier environment for digital assets in the world's largest economy. Bitcoin (BTC) hit a fresh record high of $76,330 during the U.S. day and is up 9.5% over the past 24 hours. Ethereum's ether (ETH) surged to just shy of the $2,700 level, up 11% during the same period. The broad-market CoinDesk 20 Index advanced 10.7%, led by gains of decentralized exchange Uniswap (UNI), layer-1 blockchain Solana (SOL) and decentralized GPU rendering platform Render (RNDR). The violent crypto rally triggered $592 million in liquidations of leveraged derivatives trading positions across all crypto assets during the day, CoinGlass data shows. The majority, some $390 million of the liquidations were leveraged shorts betting on lower prices, making the largest short squeeze in at least the past six months. Crypto stocks also joined the rally, led by crypto exchange Coinbase's (COIN) 31% advance. Bitcoin miners Riot Platforms (RIOT), TeraWulf (WULF) and CleanSpark (CLSK) were up 20%-25%, too. The action happened amid a risk-on day with the Nasdaq and S&P 500 climbing 3% and 2.5%, respectively, following Trump's decisive win in the U.S. elections. Bettors on blockchain-based prediction venue Polymarket project that Republicans are poised to clinch both houses of Congress, a result that observers see as even more bullish for the crypto industry. "It's hard to think how the election outcome could have landed better for the industry, and expectations of key regulatory improvements are likely to build in the coming months and quarters," David Lawant, head of research at crypto prime brokerage FalconX, said in a Wednesday report. "Such clarity could open room for additional crypto ETF products, covering the main crypto assets and potentially also a broader crypto index, and give entrepreneurs and investors more comfort in U.S. token launches." However, Lawant warned of short-term risks in the meanwhile, which may include "last-minute enforcement actions by departing officials." Bitcoin's new record high marks a decisive breakout from its grueling, eight-month consolidation phase, which tested crypto investors' patience. Analysts say the leading crypto asset may have more room to run. "Every way I look at bitcoin here after the election, there just are no more excuses or reasons left for why it doesn't full send over the next 9-12 months," well-followed cross-asset trader Bob Loukas said in an X post. With the election over, the next key event to watch is Thursday's Federal Open Market Committee meeting, where market participants near-universally expect policymakers to lower Fed fund rates by 25 basis points, per the CME FedWatch Tool. https://www.coindesk.com/markets/2024/11/06/bitcoin-blasts-past-76k-for-first-time-as-violent-crypto-rally-liquidates-nearly-400m-shorts/

2024-11-06 21:09

Quinn Thompson, the founder of crypto hedge fund Lekker Capital, shared with CoinDesk why he was so confident Donald Trump would win the U.S. presidential election despite the polls. Donald Trump won the 2024 presidential election by a landslide. Whereas polls indicated the race was a tossup, crypto hedge fund Lekker Capital went full-in on the Republican candidate. The fund’s founder, Quinn Thompson, told CoinDesk how he came about his non-consensus view. Former President and now President-elect Donald Trump’s landslide victory in the U.S. election shocked many, but not Quinn Thompson. The founder of crypto hedge fund Lekker Capital has been publicly bullish on Trump since at least mid-March and remained steadfast even as the market vacillated. He positioned his fund accordingly going into Tuesday's election — he bought solana (SOL) and bitcoin (BTC) miners involved with artificial intelligence — despite a multitude of polls claiming that the race was a toss-up or that Vice President Kamala Harris was in the lead. The result? It has been Lekker’s most successful trade since the fund was launched six months ago, Thompson told CoinDesk. He declined to give exact numbers. SOL has surged 13% in the last 24 hours and isn't far from multi-year highs. AI-related bitcoin miners such as Core Scientific (CORZ), Hut 8 (HUT) and HIVE (HIVE) are up roughly 10% Wednesday, while BTC is soaring 8.7% and hit a new all-time high of $75,600. “It's difficult for investors to take public stances because politics is such a divisive topic. Just like how it's taboo to talk about it with strangers,” Thompson said, before adding that herein lies the appeal of investing in a hedge fund that focuses on macroeconomics. “People invest in macro-driven strategies because they are non-consensus by requirement,” Thompson wrote in a Wednesday email to his fund’s investors. “In order to get paid for being correct in macro, it requires going against the grain for long periods of time and developing conviction on ideas that at times strongly go against popular opinions.” Trump won the Electoral College and popular vote, but that’s not all: Republicans now control the Senate and may well keep control of the House of Representatives — giving them the presidency and all of Congress. For Thompson, that’s a clear mandate for a socially liberal but fiscally conservative government — one that is bound to make life easier for the crypto sector after the impediments posed by current President Joe Biden as well as Trump during his first term. Trump reversed course on crypto this year, vowing to make the U.S. a crypto leader. “This is one of the most monumental days in the history of crypto. The industry has been vehemently opposed by the most powerful entity in the world — the U.S. government — for four years straight and the target of many partisan political agendas as a result,” Thompson told CoinDesk. “Not only has that been lifted in real-time to be more neutral, but we've overnight moved to a stance of adoption and embrace,” Thompson added. “This team understands the industry and [its] potential and plans to fully harness that. It is simply impossible to price in the positive knock-on effects of this overnight.” How did he do it? There’s a few reasons why Thompson bet on Trump. One of them was voter preference — the economy, immigration and foreign policy were at the top of the priority list for most voters in 2024, compared to the pandemic and racial inequality in 2020. Harris was vulnerable to these issues due to the ongoing wars in Ukraine and the Middle East, the bout of inflation that occurred early in Biden’s term and the administration’s policies regarding illegal migrants. Thompson also predicted that Democrats would face turnout issues due to a lack of enthusiasm for Harris, who only entered the race in July after Biden dropped out, while Republicans would be optimistic about their candidate. That’s not to say that everything went perfectly. Thompson said he failed to take profits on portions of the trade before the late October pullback, which saw bitcoin fall from $72,000 to $67,000 after Trump’s odds of winning dropped from 65% to 55% on Polymarket. “Last minute outlier/wrong polls made people second-guess and become very fearful and uncertain,” he said. https://www.coindesk.com/markets/2024/11/06/how-this-crypto-hedge-fund-nailed-the-trump-trade/