Trump’s Re-election Momentum Fuels Cryptocurrency: ETFs in Focus

Despite recent volatility, the outlook for cryptocurrencies remains optimistic. Bitcoin prices have risen by nearly 9% since the attempted assassination of Donald Trump, which left him wounded. Trump, a cryptocurrency advocate, is likely to return to office for a second term as President of the United States after the incident.

With the Fed set to cut interest rates later this year and the possibility of a spot Ether ETF being approved, this scenario creates opportunities for digital currencies.

What Does Trump’s Election Victory Mean for Cryptocurrency?

According to Polymarket’s report in Forbes, after the assassination attempt, Trump’s chance of winning the presidential election increased to 70 percent, while President Biden’s chance of being re-elected dropped to 16 percent.

Donald Trump, who has begun accepting donations for his campaign in cryptocurrency, has positioned himself as a crypto-friendly figure and has repeatedly criticized Democrats’ efforts to regulate the crypto sector. Trump, who is set to address the Bitcoin 2024 conference in late July, is also acting as a supporter for the cryptocurrency market.

Trump’s June meeting with Bitcoin miners and his stance that all remaining Bitcoin should be mined in the U.S. suggest that a potential election victory would be a major catalyst for the volatile cryptocurrency market, according to Yahoo Finance.

Trump’s second term as president not only promises a potential surge in digital asset prices, but also paves the way for clearer regulations and wider acceptability.

Fed’s Rate Cut Will Raise Prices

The increasing likelihood that the Fed will start cutting interest rates starting in September this year, coupled with de-dollarization, is likely to create more opportunities in digital currencies. Investors may see Bitcoin as an alternative to the depreciating dollar, which moves in the opposite direction of the Fed’s interest rate adjustments.

According to the CME FedWatch Tool, the Fed could start cutting interest rates starting in September this year, with a 89.9% chance of a 5-5.25% cut. The possibility of further rate cuts becomes more pronounced towards December, with a 38.7% chance of rates falling to 4.75-5%. Interest rates could fall further, with a 52.6% chance of rates falling to 4.5-4.75%.

In addition, the Fed’s interest rate cut will increase risk appetite, which will be positively reflected in cryptocurrency prices.

Other Factors That Stimulate the Cryptocurrency Market

With the launch date pushed back to mid-to-late July, approval for spot Ether ETFs is seen as a turning point in the cryptocurrency market that is poised to impact both the broader market and Ethereum in particular (Read: Is It Time to Buy Ether ETFs on Hopes for an Approval Rally?)

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Positive changes in the digital currency’s demand-supply dynamics also increase the likelihood of an asset’s price appreciation. With the cryptocurrency’s supply constrained by 50% since its halving in April, we could see increased inflows into cryptocurrency ETFs in the coming months. Historical trends further support a positive outlook for the cryptocurrency market (Read: Is a $500,000 Bitcoin Rally Possible? Crypto ETFs to Consider).

ETFs to Consider

Below, we mention a few ETFs for investors to increase their portfolio exposure to digital currencies and benefit from the long-term uptrend of these currencies.

We can gauge the potential impact of Trump’s election victory on digital asset prices by examining the performance of the following funds during pre-market hours following the assassination attempt on Trump last Saturday.

IShares Bitcoin Trust Registered (IBIT) gained 8.28% in pre-market hours as of June 15. Grayscale Bitcoin Trust (GBTC) gained 8.37% in pre-market hours as of June 15. Fidelity Wise Origin Bitcoin Fund (FBTC) gained 8.49% in pre-market hours as of June 15. ARK 21Shares Bitcoin ETF (ARKB) gained 8.56% in pre-market hours as of June 15. Bitwise Bitcoin ETF Trust (BITB) gained 8.31% in pre-market hours as of June 15.

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Grayscale Bitcoin Trust ETF (GBTC): ETF Research Reports

iShares Bitcoin Trust (IBIT): ETF Research Reports

Fidelity Wise Origin Bitcoin Fund (FBTC): ETF Research Reports

ARK 21Shares Bitcoin ETF (ARKB): ETF Research Reports

Bitwise Bitcoin ETF (BITB): ETF Research Reports

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