Bitcoin ETFs such as the VanEck Bitcoin ETF Trust (HODL ) didn’t vote in Tuesday’s presidential election. But the largest cryptocurrency and related ETFs signaled approval, soaring as the results came in.
At the close of U.S. markets Thursday, HODL, which is part of the original batch of spot bitcoin ETFs that debuted in this country earlier in 2024, was higher by 9.60% over the past week. That signals HODL was an effective pricing tool regarding forecasting election results and positively correlated to the outcome.
With the election in the rearview mirror, HOLD, its peers, and bitcoin itself don’t necessarily lack for catalysts. Those could include increased risk appetite among investors and President-elect Trump making good on pro-crypto pledges made on the campaign trail.
“If the market starts to rise, investors who haven’t fully participated might rush to buy in, fearing they’ll miss out on gains. What is key is that Trump is good for markets in general; this is not specific to crypto. What we have seen is an elevated volatility complex over the last few months,” noted Fink Money David Belle.
Why Bitcoin, HODL Can Continue Climbing
As history proves, there’s often a difference between what candidates say and what elected officials do. However, should Trump and his incoming team continue their embrace of the cryptocurrency ecosystem, bitcoin could benefit.
“The second Trump presidency will create a more favourable regulatory environment, potentially driving renewed institutional demand, as Trump aims to transform the US into a cryptocurrency leader,” observed Gabriel McKeown of Sad Rabbit Investments.
Some of bitcoin’s pre- and post-election bullishness could be attributable to Trump discussing tariffs during the campaign. Those levies against U.S. trading partners would likely be inflationary, potentially bolstering the case for bitcoin.
However, there’s also a belief that Trump’s tariff talk is just a bargaining chip. And it’s widely known he favors lower interest rates. That’s something that would be difficult for the Federal Reserve to deliver if inflationary pressures are reborn. What’s also clear about the president-elect is that he opposes the idea of a central bank digital currency. And that could bode well for bitcoin’s ongoing leadership among digital currencies.
“Trump made a serious commitment during his election campaign to not pursue or implement a Central Bank Digital Currency (CBDC) and to allow individuals to be self-custodians of Bitcoin. This paves the way for Bitcoin to continue to be the leading digital currency, and as such, this bullish news has been reflected in today’s price,” said Chris Barry, director at Thomas Legal.
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