Analysts at HC Wainwright believe that the positive market reaction to cryptocurrencies indicates increased confidence in the election prospects of Republican presidential candidate Donald Trump.
This confidence is due to Trump being known for his pro-cryptocurrency stance, particularly his support for Bitcoin (BTC) mining in the US.
Following the failed assassination attempt on Trump during a campaign rally in Butler, Pennsylvania on Saturday, July 13, Bitcoin and BTC miner stocks have seen a notable jump. BTC has gained more than 9% since the incident, reaching a high of around $63,790 on Monday, while miner stocks are up about 10% in Monday’s session.
“Many believe the tragic event immediately boosted Trump’s chances of winning the November election, and given that Trump is widely seen as a pro-crypto candidate who has publicly supported Bitcoin mining in the US, markets rallied after the failed attempt,” wrote Mike Colonnes, CFA.
Sales pressure
This price rise coincides with the end of selling pressure from the German government, which liquidated the remaining 50,000 BTC seized in the Movie2k case. The overhang on BTC prices has eased, with US spot BTC ETFs seeing over $1 billion in net inflows last week, acquiring over 18,000 BTC.
In addition, the high selling pressure on the chain was partly due to the start of Mt. Gox’s long-awaited payout. Mt. Gox became the world’s largest Bitcoin exchange in 2010, but faced a significant setback in 2014 when it halted trading, filed for bankruptcy, and disclosed the loss of approximately 850,000 BTC due to thefts. Recently, the movement of 47,228 BTC from a cold wallet associated with Mt. Gox caused a market reaction, while miner selling pressure continues to weigh on prices following the recent halving, which reduced mining rewards by 50%.
Increased hash rate
BTC rose 8.7% to $61,015 in the week ending July 7, outperforming broader stock indices. The network hashrate increased 2.7% to 598 EH/s, while the network difficulty remained at 79.5T after a 5% adjustment on July 4.
Higher BTC prices offset lower transaction fees, pushing the hash rate up 5.2% to $0.049/TH/day, reaching $0.05/TH/day for the first time in three weeks.
