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Bitcoin rose past the $82,000 mark on Binance, marking a substantial 17% increase since the public announcement of Donald Trump’s victory in the recent US presidential election on Wednesday, November 6. This past weekend, the BTC price staged a rare “weekend pump.” , with an increase of more than 6%. While there are several reasons for this move, one clear main reason stands out: Donald Trump’s victory.
#1 The Bitcoin “Trump Pump”
Donald Trump’s victory has significantly boosted Bitcoin market sentiment, mainly due to his campaign promises and supportive legislative initiatives. During his election campaign, Trump promised to establish a national Bitcoin reserve by retaining ownership of the 208,000 Bitcoins seized by various law enforcement actions over the years.
Senator Cynthia Lummis, a Republican from Wyoming often referred to as the “Bitcoin Senator” for her fervent advocacy, introduced the Bitcoin Act. This legislation aims to acquire 1 million BTC within a period of five years.
As a Bitcoinist reportedthe Bitcoin reserve could become a reality quite quickly. BTC Inc. David Bailey, a key Bitcoin advisor to Trump, recently said this could be done within the “first 100 days” of Trump’s term.
In light of this, crypto research firm Matrixport writes in their latest investor note: “With expectations that Trump will transform US regulatory policy into a more pro-crypto environment, the bullish momentum appears difficult to stop. With its inauguration on January 20, 2025, the market has several weeks to sustain this rally.
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Arthur Hayes, founder of BitMEX, echoed this optimism about X: “Some of you don’t believe Trump is about to throw away the $ and print money. BTC disagrees. Here Bitcoin leads against my new money supply indicator US Bank Credit. The market speaks, listen.”
Renowned crypto analyst MacroScope (@MacroScope17) continues elaborated on the implications for institutional investors: “Very important for BTC traders to understand how the game has changed since the election. In the institutional world, investments are built around having a dissertation […] It is difficult to overstate how much the position has now changed for BTC in terms of the policy/political element.”
#2 Rumors of Nation State Adoption of Bitcoin
The strategic plans to establish a national Bitcoin reserve under Trump carry significant geopolitical weight and could potentially spark a global race to amass Bitcoin reserves. David Bailey commented, “The Bitcoin Space Race has begun,” noting that “game theory is playing out faster than anyone could have expected.”
Mike Alfred, Founder and Managing Partner of Alpine Fox LP, shared his excitement about X: “I just got a phone call out of the blue. It was someone important and they said someone big is buying Bitcoin in size tonight. I almost couldn’t believe it when they said the name. Wild. We are going so much higher.”
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Bailey noted on November 10: “There is at least one nation-state that has actively acquired Bitcoin and is now a top 5 holder. Hopefully we’ll hear from them soon.” His claim, accompanied by a meme suggesting certainty over speculation. He added about the size: “Top 5 holder of bitcoin for all users.”
There is at least one nation-state that has actively acquired Bitcoin and is now a top 5 holder. Hopefully we’ll hear from them soon.
— David Bailey
$0.85mm/btc is the floor (@DavidFBailey) November 9, 2024
#3 Short squeeze
A significant short squeeze has also contributed to Bitcoin’s price increase. Charles Edwards, founder of Capriole Investments, commented on X: “Approximately $1 billion in shorts squeezed! Go from $76 to $81K from the weekend. Open interest at the same level as when BTC was trading at $62K. Provided funding continues to stabilize, this is a very healthy upward movement.”
Data from Coinglass confirms this, revealing that $133.15 million worth of BTC shorts were liquidated on Sunday, with another $33 million on Saturday. This substantial liquidation of short positions has reduced selling pressure, fueling further upward momentum in Bitcoin’s price.
#4 Retail is back
The revival of retail interest has been another crucial factor in Bitcoin’s recent rally. Cameron Winklevoss, Founder of Gemini, observed on X: “The road to $80k bitcoin was paved with steady demand for ETFs. Not retail FOMO. Not much fanfare. People buy ETFs, they don’t sell them. This is sticky HODL-like capital. The floor continues to rise. Where are we in the cycle? We just won the toss, the innings hasn’t started yet.’
Data from Google Trends supports this story, indicating a 53% increase in Bitcoin-related searches since the first weekend of October. On November 10, Bitcoin web searches peaked at 95, up from 42 points at the end of October. This increase in search activity signals increased retail interest and a potential influx of new investors into the market.
At the time of writing, BTC was trading at $81,259.
Featured image created with DALL.E, chart from TradingView.com
