The Trump Link: Bitcoin Rises on November Hopes

We know Bitcoin (BTC-USD) is volatile. We know it's hard to value. And we know that what happens next may very well be tied to who wins the November presidential election.

We know Bitcoin (BTC-USD) is volatile. We know it’s hard to value. And we know that what happens next may very well be tied to who wins the November presidential election.

The surge in Bitcoin prices over the last two days shows ample evidence of that. And I’d argue that Bitcoin will become more correlated to the odds that former President Donald Trump gets reelected.

This weekend’s horrific assassination attempt on Trump seems to have created a strong link between crypto’s fortunes and Trump’s campaign.

Trump has been championing cryptocurrencies as part of his pitch to undecided voters with a pro-Bitcoin tilt. In June he met with Bitcoin miners, and subsequently announced his support of mining. His post on Truth Social has set the narrative. “Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left. We want all the remaining Bitcoin to be MADE IN THE USA!!!”

In the eyes of investors, President Joe Biden is anti-Bitcoin and Trump is pro-Bitcoin. It should come as little surprise, then, that the Republican Party’s current pro-crypto stance is spearheaded by Trump. He clearly knows its audience well, framing this as a battle against central bank digital currencies, and bringing to light the need for “Bitcoin Rights” focused on financial privacy and autonomy.

I think this is important, because should Trump win the election and enact pro-cryptocurrency policies, there would be no going back. Concerns over political roadblocks would dissipate, and perhaps integration into mainstream financial institutions would accelerate given the government’s blessing. So much of the slowness of adoption on the corporate level is purely coming from an unfavorable regulatory environment. Perhaps a Trump presidency reverses that entirely.

To be clear, I’m not arguing that the moment Trump wins, Bitcoin makes new highs. In fact, I’ve argued before here on InvestorPlace that it looks more to me like Bitcoin is going through a classic Wyckoff distribution pattern which suggests it’s in a topping formation in the near term. But you can’t ignore how price now interacts with the prospect of Trump winning.

The election season, it appears, may be consequential for the cryptocurrency space. And unless Biden pivots to a friendlier tone for Bitcoin, Trump’s words alone could draw the chart better than Bitcoin maxis can for now.

I think it makes sense to have some small allocation in BTC for now, but just be aware that no matter who wins the presidential election, volatility is likely only going to rise for all risk-on assets. This bet on Bitcoin isn’t without risk.

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