Bitcoin surges 2.7% to 60,000 level again; what is driving the rally?

Bitcoin surged above $60,000 following Donald Trump’s bold response to an assassination attempt, leading to speculation that his presidential election prospects have strengthened, according to Bloomberg report.

The former president, known for his supportive stance on cryptocurrency, reported being shot in the right ear during gunfire at a political rally in Pennsylvania on Saturday. His campaign assured the public of his well-being, confirming he was “fine” and eager to attend the upcoming Republican National Convention starting Monday in Milwaukee.

“If the assassination attempt on Trump positively impacts Bitcoin’s price, then it would be one of the most bizzare catalysts for Bitcoin’s price surge. According to Polymarket, odds for Trump becoming President shot up to 70% after today’s incident. In the last few weeks, Trump has positioned himself as pro-crypto. The crypto markets are also relieved by the news that Germany has finished selling its Bitcoin. So overall, these are interesting developments based on impulses and voter sentiment but BTC would need stronger factors to back its price surge,” said Rajagopal Menon, VP, WazirX.

PredictIt data indicated an increase in Trump’s chances of winning the presidency again following today’s events. Images of Trump defiantly raising his fist with a bloody right ear, against the backdrop of the American flag, have gone viral on social media and television since the incident.

President Joe Biden expressed relief that Trump was safe and strongly denounced the violence.

The markets are expected to react with increased volatility, possibly mirroring the trades seen during last month’s debate, which favored Trump. During that period, the US dollar strengthened and Treasury yields rose.

“Following a recent downturn driven by uncertainty surrounding the Mt. Gox BTC distribution and the actions of the German government’s Bitcoin sell-off, BTC experienced a significant slump over the past nine days, dropping from over $58,000 to just under $54,000. With no further sell-offs anticipated from the German government, the absence of this downward pressure is expected to pave the way for a potential upward movement in Bitcoin’s price, a trend already underway as BTC surpasses $60,000,” said Sumit Gupta, co-founder, CoinDCX.

Bitcoin surged by up to 2.7% to $60,160.71 as of 1:05 a.m. in New York. The leading cryptocurrency had stabilized recently, buoyed by optimism surrounding ETFs from major players such as BlackRock Inc. and Fidelity Investments, which are seen as providing stable demand that could mitigate price fluctuations.

Gupta further added, “As economic indicators point towards a likely interest rate cut by the Federal Reserve, there is heightened anticipation of increased investor interest in Bitcoin as a hedge against inflation. Despite recent inflationary pressures indicated by the Producer Price Index (PPI), Bitcoin’s upward trajectory confirms its status as a favored alternative asset.”