The recent policy shift by former President Donald Trump towards cryptocurrencies, particularly Bitcoin, could significantly impact the price of the digital asset in the near term, according to a report by investment bank Jefferies. With the U.S. presidential election in November fast approaching, the outcome could tie directly to Bitcoin’s performance, analysts Jonathan Petersen and Joe Dickstein noted.
At the Bitcoin Nashville conference last week, which saw attendance from various politicians including Trump, a political undertone was evident. Trump’s speech at the event highlighted his new pro-crypto stance. He promised to maintain a strategic Bitcoin reserve and pledged not to sell the government’s seized Bitcoin. Moreover, Trump committed to appointing crypto-friendly regulators, establishing a presidential advisory council for the crypto industry, and positioning the U.S. as the “crypto capital of the planet.”
Jefferies emphasized that this positive shift in Trump’s policy towards crypto is very recent. However, it could influence Bitcoin’s price depending on the election results. The report suggests that Trump’s overtures to the industry could lead to a favorable regulatory environment for cryptocurrencies, potentially boosting investor confidence and driving up Bitcoin prices.
Bitcoin has seen a modest gain of about 5% since its halving in April, despite a network hashrate drop of 8% in May and June. This indicates that the profitability of mining is slightly better than initially feared, with mining revenue per exahash down by 40%-45% instead of the anticipated 50%. Jefferies noted that larger Bitcoin miners are still in growth mode, with plans to significantly expand their installed hashrate. This growth phase is indicative of the industry’s increasing competition and mining difficulty.
The Bitcoin mining sector is also undergoing a consolidation phase. CleanSpark recently agreed to acquire GRIID, and Riot Platforms made a public offer for Bitfarm, which was later rejected. According to comments from mining firm management teams, more mergers and acquisitions (M&A) are expected in the sector. The report suggests that access to power is becoming more valuable than the mining fleets themselves.
Also Read: Trump’s Bitcoin Strategy – Can BTC Help Erase $35 Trillion US Debt And Outshine China?
In conclusion, the outcome of the U.S. presidential election in November could have a profound impact on Bitcoin prices. Trump’s recent policy shift towards a pro-crypto stance, if continued under his administration, could lead to a more favorable regulatory environment for cryptocurrencies. As the political landscape evolves, so too will the dynamics of the crypto market, making it a space to watch closely in the coming months.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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