(Kitco News) – Bullish momentum is back for the crypto market following this past weekend’s Bitcoin 2024 conference, where presidential candidate Donald Trump promised to make Bitcoin (BTC) a strategic reserve currency for the United States.
"If we don't embrace crypto and bitcoin technology, China will, other countries will,” Trump said. “They'll dominate, and we cannot let China dominate. They are making too much progress as it is.”
He said he would establish a crypto presidential advisory council and create a national “stockpile” of BTC using cryptocurrency the U.S. government currently holds.
“Many Americans do not realize that the U.S. government is among the world's largest holders of Bitcoin – The Federal Government has almost 210,000 Bitcoin or 1% of the total supply that will ever exist,” Trump said. “But for too long, our government has violated the cardinal rule that every Bitcoiner knows by heart: ‘NEVER SELL YOUR BITCOIN.’”
“And so, as the final part of my plan today, I am announcing that if I am elected, it will be the policy of my administration to KEEP 100% of all the Bitcoin the U.S. government currently holds or acquires in the future,” he added. “This will serve, in effect, as the core of a Strategic National Bitcoin Reserve.”
Trump further appealed to cryptocurrency proponents by promising to commute the sentence of Ross Ulbricht, creator of the infamous Silk Road marketplace which allowed users to buy and sell drugs and other illegal products secretly.
“As I take steps to transform that vast wealth into a permanent national asset to benefit all Americans, today I repeat my promise to commute the sentence of Ross Ulbricht,” Trump said.
Other promises made by the presidential hopeful include removing Securities and Exchange Commission Chair Gary Gensler from office “on day 1,” immediately shutting down “Operation ChokePoint 2.0,” appointing a Bitcoin and crypto presidential advisory council, designing transparent regulations within the first 100 days, defending the right to self-custody, creating a framework for the safe and responsible expansion of stablecoins, making the U.S. the world’s number one Bitcoin mining powerhouse, stopping the “war on crypto,” and never allowing a central bank digital currency during his presidency.
“A national Bitcoin strategic reserve has implications on how nation states would adopt Bitcoin as a ‘store of value’, and build Bitcoin reserves similar to gold reserves,” said Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia in a note to clients on Monday.
“The crypto community and industry seem clear that crypto is no longer a bipartisan issue,” the analysts added. “We believe the crypto markets will trade completely top-down on political developments until the election results in early November."
They also said that while reports about presidential candidate Kamala Harris’ team reaching out to cryptocurrency companies are on the rise, they “believe this olive branch is a tad late and the industry would seek more concrete action (reversal of previous wrongs) before warming up to the Democrat campaign.”
Bitcoin’s price initially responded negatively to the speech, with many traders opting to “sell the news” as rumors that Trump would make the announcement had been circulating around the crypto ecosystem for more than a week.
But things started to pick up for the top crypto near midday on Sunday, and on early Monday, bulls managed to rally back above $70,000 for the first time since June 12.
BTC/USD Chart by TradingView
“BTC surpassed $69,000, and the market sentiment is relatively optimistic,” said Ryan Lee, Chief Analyst at Bitget Research. “Presidential candidate Trump attended the BTC conference in Nashville and announced that if elected, he would establish a national strategic BTC reserve, and the U.S. government would not sell any BTC it holds. Additionally, Senator Cynthia proposed that the Treasury purchase 1 million BTC.”
“BTC contract data is generally optimistic. The open interest volume has been rising with the price, and the long-short ratio of contract accounts has remained below 1 for nearly 10 trading days, indicating a high level of bullish sentiment among major funds,” Lee said. “This suggests the possibility of BTC breaking upwards in the near future.”
“This week, 5 out of 7 major U.S. tech giants are releasing their financial reports,” he added. “If their performance continues to be strong, Nasdaq might experience a weekly rebound, driving up risk assets. Additionally, the Fed's FOMC meeting is scheduled for this week, with the market expecting dovish remarks from Powell.”
Raoul Pal, the founder and CEO of Global Macro Investor, thinks this is just the start of a months-long rally.
“Macro Summer is beginning to take hold and should last at least for the rest of 2024 and into 2025,” Pal said. “Bitcoin is ready to soon break the giant cup and handle and head into the Banana Zone.”
Pal coined the term “Banana Zone” to describe periods of significant upward price movement.
According to Pal, Bitcoin will confirm a move toward a new record high when it breaks out of the current cup and handle formation.
Crypto trader Moataz Elsayed, also known as “Eljaboom,” confirmed Pal’s outlook, tweeting, “A weekly close above $70,000 and the game will be over for bears!”
At the time of writing, Bitcoin trades at $67,780, an increase of 0.18% on the 24-hour chart.
