The Trump effect on Bitcoin: +30% in one week

The day before Donald Trump’s victory in the 2024 USA presidential elections, the price of a Bitcoin was about $69,000.

Last night it almost reached $90,000. 

So from November 5 to 12, the price of BTC grew by 30% in one week. 

The Trump effect on the price of Bitcoin (BTC)

The fact that it is not just a case is highlighted by the simultaneous growth of market values of other assets as well. 

For example, the stock of Nvidia in the same period recorded a +8.7%, which then scaled down to +5%. 

Instead, the price of gold has fallen by 5%.

Tesla even rose by 40%, up to yesterday’s peak, surpassing even Bitcoin. Tesla however was coming from three difficult years, and had not yet fully recovered the losses of 2022. Furthermore, on Tesla there was the Trump effect combined with the Musk effect.

However, the asset on which the Trump effect is most evident seems to be Bitcoin, because already on the very day of his victory, November 6, it recorded new all-time highs. Tesla, on the other hand, is still far from the peaks of 2021, despite the +40% of the last week, while Nvidia is currently only at +1% compared to the previous highs of October.

Instead, Bitcoin is at +18% from the previous all-time highs of March, also because Trump has stated and repeated that he would like to transform the USA into the world capital of criptovalute.

Where is Bitcoin going? 

To tell the truth, however, this +30% of BTC in a week raises some doubts.

Or, rather, there are already those who speculate that it could be an unsustainable rise. 

In reality, for now, in the short or very short term, there are no signs of a possible strong decline. 

In particular, as long as it manages to stay above $87,000, it seems really difficult for it to retrace. 

However, it is not at all impossible that, after having tried to reach $90,000 without succeeding, it may now correct a bit. 

Therefore, excluding the hypothesis of lateralization, which currently does not seem credible, the credible hypotheses are three. 

The first is that FOMO may continue to push the price of Bitcoin upwards, even well beyond $90,000. According to some, this scenario might not be particularly likely, but there are several analysts who consider it likely if $87,000 holds. 

The second is that there may be a correction not capable of affecting the medium/short-term upward trend. This second hypothesis is not in contrast with the first, because there could also be an initial correction followed by further increases. 

The third is that there is instead a retracement, that is, the temporary end of the bull trend followed by a descent to lower levels. 

Donald Trump pushes Bitcoin towards $100,000

However, there is a sort of elephant in the room that cannot be ignored. 

The question of questions at this moment is the possible achievement of a price peak around or above $100,000. 

During the previous cycle, the one concluded in April of this year with the fourth halving, the maximum price peak was recorded at about $69,000 in November 2021. 

It should be noted, however, that already in April of the same year, $64,000 had been reached, but due to the Chinese ban on crypto trading in May, Chinese capital was lacking, causing the price of Bitcoin to fall to $30,000. 

In the absence of Chinese capital in 2021 BTC was no longer able to truly take off, and its run stopped only at $69,000. 

If there had been no problems in 2021, and the trend of the Bitcoin market had followed that of the two previous cycles, the year-end peak would have been well above $100,000. 

The point is that now Chinese capital has returned, even though the ban is technically still in place. With Chinese capital, the lost ground in the second half of 2021 could be recovered, and perhaps the fateful $100,000 could already be reached in this phase. 

The current phase

The current phase of Bitcoin’s price trend is linked to the USA presidential elections. 

In all three previous cases (2012, 2016, and 2020), shortly before the US presidential elections, a rise was triggered that led the price of Bitcoin to register new highs, or to approach them, between December and January of the following year. 

Therefore, the current phase could also continue for a couple more months, remembering that Donald Trump will only take office on January 20, 2025. At that point, the classic “sell-the-news” could also occur.

However, in the past, the three phases following the elections once concluded did not interrupt the bullrun, but only momentarily slowed it down. 

In fact, the next phase, between February and April 2025, could also be a growth phase again, perhaps followed by a momentary retracement, and then a third growth phase in the second half of 2025. 

Therefore, even if the current phase should conclude relatively soon with a retracement, this would not exclude the possibility that other bull phases could be triggered during 2025. 

In particular, it could be the decline of the dollar that fuels these subsequent phases. Currently, the dollar is on the rise, but generally, after the US presidential elections, it falls for several months. 

The current level of the Dollar Index is decidedly high, above 105 points, while next year it could drop to around 90, as it did in 2013 and in 2017. This drop could favor Bitcoin, even though in 2016, for example, when Trump was elected for the first time, the dollar continued to strengthen even after the elections for about a month and a half.