Bitcoin has surged to its highest level since April, reaching $73,544.
Forbes reported that the Nov. 5 presidential election is among several market factors affecting the $1.4 trillion cryptocurrency, contributing to the 6% increase recorded around 3 p.m. EDT (7 p.m. GMT) on Tuesday, Oct. 29. The rise puts Bitcoin’s October gains at 13%, outpacing the S&P 500, which advanced 1% this month.
Several other major cryptocurrencies and shares of companies involved in Bitcoin mining — the energy-intensive process of unlocking bitcoins from the digital blockchain — also saw significant gains Tuesday. Ethereum jumped 4% to reach a 10-day high of $2,637, while Binance Coin increased 2% to an eight-day high of $608. Solana climbed 2%, reaching a three-month high of $182.
Prominent investors, including hedge fund billionaire Paul Tudor Jones, are promoting Bitcoin as protection against inflation, particularly as government policies from presidential candidates Kamala Harris and Donald Trump are projected to add trillions to the national debt.
However, skepticism remains about the effectiveness of monetary policy in combating inflation following the Federal Reserve’s recent interest rate cut. As AFROTECH™ reported, the Sept. 18, 2024, rate cut was the first since March 2020, the beginning stages of the COVID-19 pandemic.
After a split decision, the Fed’s policy-setting committee decided on a 50-basis-point reduction, lowering the federal funds rate to a range of 4.75% to 5%. The move was a decrease from the previous range of 5.25% to 5.5%, which was the highest level since 2001.
According to Forbes, Bernstein research shows that U.S. regulators’ January approval of spot Bitcoin exchange-traded funds (EFTs), which drew billions from institutional investors, contributed to Bitcoin’s upward trend. Spot Bitcoin EFTs managed by firms like BlackRock, Fidelity, and Grayscale hold about $66 billion in Bitcoin, or 5% of the global Bitcoin market.
The rise also aligns with growing odds of a Trump victory in the betting market. While the former president previously expressed skepticism about digital currency, he now positions himself as a pro-Bitcoin candidate.
“If elected, it will be the policy of my administration to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future,” Trump said at a crypto convention in Nashville, TN, in late July, according to Reuters. He emphasized that the funds would form the “core of the strategic national Bitcoin stockpile.”
