Donald Trump - Donald Trump speaking with supporters at a campaign rally at the Phoenix Convention Center in Phoenix, Arizona.
Please attribute to Gage Skidmore if used elsewhere. - Gage Skidmore via Flickr
Bitcoin saw its most notable rise in nearly two months after a dramatic event involving former President Donald Trump. Following an assassination attempt during a rally in Butler, Pennsylvania, Bitcoin's value spiked by 5.2%, climbing above $63,000. This event marked the highest daily increase for the cryptocurrency since May 20.
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The rally turned chaotic when shots were fired, hitting Trump in the right ear. Quick action from his Secret Service team secured him promptly, but the incident shook the political landscape. The attack, which resulted in the deaths of the shooter and a former fire chief, prompted widespread condemnation of violence and added a new dynamic to the US presidential race.
Financial markets swiftly responded. Betting markets adjusted their odds, reflecting a higher likelihood of Trump’s re-election—a scenario seen as favorable to the cryptocurrency sector.
Benjamin Celermajer, Chief Investment Officer at Magnet Capital, pointed out that the Republican Party's pro-crypto stance boosts the cryptocurrency market's optimism regarding a potential Trump presidency.
This surge in Bitcoin recalls its rally following President Joe Biden’s lackluster debate performance against Trump in late June. Tony Sycamore, a market analyst from IG Australia Pty, commented that the incident invigorated Bitcoin's momentum by enhancing Trump’s chances of a second term.
Bitcoin as political stability hedge
Bitcoin enthusiasts argue that the cryptocurrency acts as a store of value and a hedge against political instability, despite its notorious volatility. In June, Trump engaged with the Bitcoin community, meeting miners and later posting on his Truth Social account about the significance of Bitcoin mining in the US. He positioned Bitcoin as a safeguard against a possible central bank digital currency.
The crypto sector has been backing candidates who favor digital assets, with substantial donations funneled to the Fairshake political action committee. This move aims to challenge regulatory measures by the Securities and Exchange Commission. Trump's campaign has embraced digital currencies, accepting crypto donations and discussing crypto policies with billionaire Elon Musk.
Bitcoin’s current valuation follows a record high of nearly $74,000 in March, largely driven by demand from US exchange-traded funds. However, the token experienced a decline due to moderated inflows and sales of seized tokens, along with concerns about potential disposals by creditors of the defunct Mt. Gox exchange.
CoinShares Ltd. data shows that Bitcoin investment products saw an influx of $1.35 billion last week, the most significant since early June, boosting total crypto investment inflows to $1.44 billion for the week ending July 12.
Trump rally incident shakes markets
The assassination attempt unfolded swiftly. Former fire chief Corey Comperatore was among the casualties, shot while shielding his family. The assailant, identified by the FBI as 20-year-old Thomas Matthew Crooks, was neutralized by Secret Service counter snipers after trying to get closer to the stage. Trump initially reacted to the first shot by raising his hand to his ear before being secured by Secret Service agents.
The repercussions of this incident are multi-layered. Politically, it has intensified the focus on security measures at political events and escalated concerns over political violence in the US. Economically, it has given the cryptocurrency market a substantial boost, particularly Bitcoin, as investors speculate on possible regulatory and economic changes that a Trump re-election might bring.
As the US presidential campaign progresses, the intertwining of political events and financial markets will likely continue to draw attention. The crypto sector's role in the election highlights the growing significance of digital assets in the broader economic landscape.
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With Trump still slated to speak at a Bitcoin conference in Nashville on July 27, the interplay between his political fortunes and the crypto market will be closely monitored.