Is This Why Bitcoin (BTC) Soared By $5,000 In 24 Hours?

After a relatively weak period of sideways trading for days, the price of bitcoin went on the offensive on Friday evening and Saturday morning and broke through $65,000 for the first time since early August.

Some of the most likely reasons behind this daily increase of $5,000 seem to be related to the US central bank and the upcoming elections in the country.

First, it was the Fed

Bitcoin’s relationship with the US Federal Reserve’s economic policies has been demonstrated numerous times in recent years, especially since the monetary entity changed tack during the fallout from COVID-19. The subsequent rise in inflation led to an unprecedented rise in interest rates.

The multi-decade peak in rates resulted in fewer funds being allocated to risky assets like BTC, leading many experts to expect a rise in prices once the US Fed decided to switch from its strategy In other words, the Fed was expected to follow the lead of the ECB, the Bank of England and the Bank of Canada and cut key interest rates.

After some delays, Chairman Jerome Powell finally announced on Friday that it was time for such actions. Speaking at the annual Jackson Hole Economic Symposium 2024, he did not provide an exact date when rates will be cut, but general expectations are that it will be in September.

Then, it was RFK

Aside from Fed actions, the price of BTC has been strongly correlated with the current US presidential election cycle. After all, the Democrats, with their current president Joe Biden, have been anything but sympathetic to the crypto industry, led by the SEC’s (unsuccessful) crusade.

On the other hand, Republican candidate Donald Trump has changed his stance on the industry and has promised that all good things will happen to Bitcoin, miners and everything in between. Yes, he even said he’s going to fire SEC Chairman Gary Gensler. Yes, his first day in office.

Biden’s withdrawal from the 2024 race and subsequent replacement by current Vice President Kamala Harris changed the narrative of this year’s election. However, more promising news for Trump, and apparently for the crypto industry, also came last night.

This time, Robert F. Kennedy, who was the most vocal supporter of Bitcoin among all the candidates, suspended his independent campaign and endorsed Trump. This was considered a positive development for Trump and thus the crypto market.

The increase from $60,000 to $65,000 in 24 hours could possibly be attributed to the two reasons mentioned above. As such, it would be interesting to follow the upcoming election, Fed policy change, and the impact on the crypto market.

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