Bitcoin is gearing up for a potential rally as we approach the end of the year, bolstered by several key factors including global economic stimuli, the U.S. election, and anticipated FTX payouts. Analysts suggest these developments could serve as crucial tailwinds for the cryptocurrency.
Earlier this week, Bitcoin exhibited a 4% drop following Iran’s missile strike on Israel but has since rebounded from recent lows, climbing above $61,500 after dipping to approximately $60,300.
Iran’s launch of over 180 ballistic missiles in response to Israeli strikes in Lebanon, including the use of hypersonic Fattah missiles, had immediate ripple effects across various markets.
Major U.S. equity indices saw declines, with the Nasdaq Composite falling by 1.53%, the S&P 500 decreasing by 0.93%, and the Dow Jones Industrial Average dropping by 0.41%.
Despite geopolitical tensions, K33 Research analysts Vetle Lunde and David Zimmerman highlight four major tailwinds poised to uplift Bitcoin: China’s economic stimulus, shifting U.S. macroeconomic data, the upcoming presidential election, and FTX’s anticipated payouts.
China’s boost to global liquidity
China’s recent aggressive stimulus measures are expected to positively influence global liquidity. Last month, the People’s Bank of China introduced several rate cuts and unveiled a $142 billion stimulus package.
These measures aim to prevent a recession and stimulate growth, creating a more favorable environment for speculative assets like Bitcoin.
Upcoming U.S. Employment Figures
The imminent release of U.S. employment data this Friday is another critical component that could influence market sentiment.
Given Bitcoin’s high correlation with U.S. equities, employment figures may impact interest rate expectations and market behavior.
A favorable employment outlook could bolster Bitcoin as investors reassess the broader macroeconomic landscape.
Impact of the U.S. Presidential Election
The impending U.S. presidential election on November 5 is also poised to significantly impact Bitcoin.
A win for Trump could serve as a positive catalyst, given his favorable stance toward the crypto industry. Conversely, a victory for Kamala Harris might result in a more cautious market reaction due to anticipated regulatory measures.
“Markets don’t like uncertainty,” said Samir Kerbage, chief investment officer at Hashdex, adding that the crypto sector will benefit once election uncertainties are resolved, potentially leading to more favorable policies.
FTX Payouts and the Crypto Market
Finally, expected payouts from FTX’s bankruptcy proceedings could inject roughly $2.5 billion into the crypto market by the end of Q4 or early Q1.
A reorganization plan for bankrupt crypto exchange FTX has garnered support from 94% of creditors from its offshore platform, FTX.com, as reported by CoinDesk.
If approved, this plan would return 118% of claims in cash to creditors, amounting to $6.83 billion. This could lead to significant repurchasing of crypto assets, bolstering liquidity for Bitcoin and other digital currencies.
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Considering these strategic tailwinds, Bitcoin appears well-positioned for a significant rally. Whether through global stimulus efforts, pivotal U.S. employment data, the unfolding election, or upcoming FTX payouts, Bitcoin enthusiasts have much to anticipate.
