Bitcoin Surges Amid FED Rate Cut and Trump’s Re-Election

Bitcoin (BTC) has hit a new all-time high of $76,000 following the Federal Reserve’s 0.25% interest rate cut, adding momentum to a market already energized by Donald Trump’s recent victory in the U.S. presidential election. With a clear pro-crypto agenda, the newly re-elected Trump administration is expected to foster an environment favorable to digital assets, further boosting confidence among investors.

Market Overview: Strong Performance Across Indices

On Thursday, November 8, U.S. stock markets reflected the positive sentiment with modest gains. The Nasdaq led with a 1.51% increase, while Dow Jones remained steady. Futures indicated a continued upward trend, while commodities saw slight shifts, with gold at $2,708/oz and oil holding at $72/barrel.

Bitcoin’s rally continued, briefly surpassing $76,000 before stabilizing around $75,900. Major altcoins also trended upward, with the crypto market cap reaching $2.687 trillion.

The percentage of profitable BTC holdings remains near its peak at 99.7%, indicating strong market sentiment.

Institutional Inflows Signal Strong Demand

The influx into BTC spot ETFs in the U.S. surged, with $1.373 billion in inflows primarily led by BlackRock’s IBIT. ETH spot ETFs also saw a positive day, with $79.7 million flowing in, indicating that institutional interest in crypto continues to grow. This robust interest has positioned Bitcoin as the world’s ninth-largest asset by market cap, now exceeding Meta’s valuation.

Trump’s Pro-Crypto Stance and Supportive Senators in Congress

Trump’s re-election has been accompanied by renewed interest in Bitcoin, with international media covering his ambitious plan to make the U.S. the “crypto capital of the world” and establish a strategic Bitcoin reserve. Trump’s advocacy for BTC as a reserve asset could have a significant impact, particularly if other countries follow suit in legitimizing Bitcoin as a part of their national reserves.

Several U.S. legislators have voiced support for crypto, including Representative Tulsi Gabbard, who believes that the U.S. should accumulate BTC as a national asset. Additionally, U.S. Space Force Major Jason Lowery has proposed that Bitcoin could play a strategic role in national defense by transforming physical energy into secure digital power. He asserts that Bitcoin’s Proof-of-Work (PoW) mechanism provides “cyber-sovereignty,” likening it to national defense over territorial and airspace sovereignty.

Lowery has criticized the Department of Defense for not exploring Bitcoin’s security benefits and has called for further research into its strategic potential. He has even proposed a “U.S. Hash Force” to safeguard access to Bitcoin through government-supported, industry-led initiatives, securing “blockspace” for future critical use cases.

Speculation on the Next SEC Chair

Following Trump’s re-election, attention has turned to who might succeed Gary Gensler as SEC Chair. Reuters recently reported on potential candidates for key financial regulatory roles, including the SEC.

At the top of the list is Dan Gallagher, General Counsel at Robinhood and a former SEC commissioner (2011-2015). Gallagher, known for his pro-Bitcoin stance, has received significant support from crypto executives, particularly those who contributed to Trump’s campaign. Other potential candidates include Paul Atkins, CEO of Patomak Global Partners, and Robert Stebbins, a partner at Willkie Farr & Gallagher. SEC Commissioner Hester Peirce, though popular within the crypto sector, has declined interest in the role.

The market is optimistic that a new SEC Chair will adopt a more favorable stance toward crypto, potentially reversing many of Gensler’s restrictive policies. Trump is expected to announce his appointments soon, bringing renewed hope to the industry.

FED’s 0.25% Rate Cut Spurs Optimism

In its November meeting, the Federal Reserve cut interest rates by 0.25%, as anticipated by the market. FED Chair Jerome Powell emphasized that despite economic slowdowns, the labor market and inflation remain under control, with the FED adopting a cautiously optimistic tone.

Following the FED’s announcement, CME’s FEDWatch Tool showed that 75% of investors now anticipate another 0.25% rate cut in December, while the remainder expect rates to hold steady.

Powell, who has served under three different presidents, including his appointment by Trump in 2016, refrained from commenting on political questions and maintained that the FED’s decisions remain independent.

Powell’s Long-Term Economic Outlook

In his remarks, Powell downplayed the impact of short-term inflationary indicators, explaining that inflation increases are likely seasonal and not reflective of rising consumer spending. The FED remains flexible, adjusting its monetary easing as needed to ensure a “soft landing” for the economy, allowing for gradual adjustments based on real economic indicators rather than speculative forecasts.

Growing Acceptance of Crypto in U.S. Cities and Global Reactions

In a notable move, the city of Detroit in Michigan announced it will begin accepting tax payments in crypto by mid-2025, joining Colorado, Utah, and Louisiana, which already accept crypto for tax and debt payments.

Globally, Russian President Vladimir Putin has reaffirmed that while Russia won’t abandon the U.S. dollar, it will reduce its reliance on it in international trade. Putin described the dollar as “the pillar of American power” but noted that this reliance is naturally decreasing due to evolving economic circumstances, particularly among BRICS nations advocating for “de-dollarization.”

Conclusion: A Positive Future for Bitcoin and the Crypto Market

With Trump’s return to office and a supportive stance toward crypto, combined with a FED rate cut that boosts economic optimism, Bitcoin and the broader crypto market are positioned for a potentially transformative period. Pro-crypto voices in Congress and strategic policies from the Trump administration are likely to create a favorable environment for digital assets, advancing regulatory clarity and fostering innovation.

Looking ahead, the future of Bitcoin and other digital assets appears promising. Although predictions for Bitcoin’s future value vary widely, the consensus remains bullish. Industry leaders, including Michael Saylor and Cathie Wood, see substantial long-term growth, further validating the crypto market’s role as a major financial asset class.

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