Former President Donald Trump, once a vocal critic of cryptocurrency, has now embraced the sector. This change comes as crypto becomes a key player in the 2024 presidential election, with significant donations flowing into a political action committee. How has Trump’s support impacted Bitcoin? Why are global stocks struggling in contrast?
Bitcoin’s price is surging due to growing support from Trump, while global stocks are facing uncertainty about future company performance. The excitement around Trump’s new stance grew after a tweet from Dennis Porter suggested that Trump might declare Bitcoin a strategic reserve asset. Speculation is rife that Trump and JD Vance could lead the first crypto-focused presidency and administration.
Bitcoin has seen an impressive performance over the past month, climbing about 11%, significantly outpacing the less than 2% rise in global equities. This rise coincides with Trump’s robust resurgence in the political arena, emerging stronger after a televised debate with President Joe Biden and surviving an assassination attempt. Trump is also scheduled to speak at a Bitcoin conference on July 27, raising anticipation about his potential crypto policies.
Global stocks, on the other hand, have been under pressure following a mixed start to the second-quarter earnings season. Investors are looking for continued momentum from this year’s rally driven by AI and tech firms. Bitcoin’s correlation with stocks has turned the most negative since 2023, indicating a significant shift in market trends.
Bitcoin has jumped about 51% in 2024, driven by demand for US exchange-traded funds and Trump’s crypto-friendly agenda. In contrast, MSCI’s global stock index has only seen a year-to-date gain of about 12%.
Trump has promised to end the “hostility” faced by the crypto industry from Biden’s regulators and Democratic lawmakers if elected. Last month, he endorsed Bitcoin, saying it would help the US become “energy dominant.” According to Sean McNulty, director of trading at Arbelos Market, “Bitcoin is now a proxy for a Trump victory.” He adds, “For stocks, there are no such clear winners and losers from a Trump trade.”
Trump’s newfound support for crypto, along with his election plans, has significantly boosted Bitcoin, making its future closely tied to the outcome of the upcoming election. Will Bitcoin continue to thrive under Trump’s influence? Can global stocks recover from their current slump? The coming months will be crucial for both markets.
