Bitcoin Price Rises as Resilience in U.S. Economy Boosts Risk Appetite
As the U.S. economy shows signs of resilience, Bitcoin’s price saw a surge on Monday, extending its rebound over the weekend. This increase was supported by broader risk appetite among investors. Let’s delve deeper into the factors driving this upward trend:
Strong Performance in Global Stock Markets
Bitcoin’s upward trajectory was in line with strong gains witnessed in global stock markets. This surge was fueled by stronger-than-expected U.S. nonfarm payrolls data, which alleviated concerns of a looming U.S. recession. However, this positive data also tempered expectations for significant interest rate cuts by the Federal Reserve.
At present, Bitcoin is trading at $63,558.3, marking a 2.7% increase by 00:41 ET (04:41 GMT).
Trump Leads Over Harris in Betting Markets
According to the crypto betting platform Polymarket, there is a notable shift in investor sentiment towards a Donald Trump presidency over Kamala Harris in the 2024 U.S. elections. Traders are currently pricing in a 50.6% chance of a Trump victory compared to 48.4% for Harris.
This change in preference towards Trump can be attributed to his pro-crypto stance and promises to enact crypto-friendly regulations if elected. In contrast, Harris has not provided any clarity on her stance regarding cryptocurrencies, raising concerns about a potential continuation of the Biden administration’s crackdown on the sector.
Altcoins Rise Amid Improving Risk Sentiment
The broader crypto markets witnessed a rise on Monday, mirroring the gains in Bitcoin and reflecting an improvement in risk sentiment. While Bitcoin led the way with a 2.7% increase, other altcoins also saw positive movement:
– Ethereum (ETH) rose by 3% to $2,487.07
– Litecoin (LTC) and Ripple (XRP) recorded gains between 2.3% and 5%
– Bitcoin Cash (BCH) remained stable, while Cardano (ADA) surged by 4.7%
However, further gains in the crypto market were somewhat capped by the rebound in the U.S. dollar on expectations of smaller interest rate cuts.
Focus on U.S. Economic Data and Fed’s Monetary Policy
Traders are closely monitoring upcoming cues on the U.S. economy, particularly after last week’s stronger-than-expected data resulted in a revision of interest rate cut bets. Currently, traders are pricing in a high probability of a 25 basis point rate cut in November, with expectations of a higher terminal rate.
In the upcoming days, a slew of Fed officials are scheduled to speak, and the minutes of the Fed’s September meeting will be released. Additionally, inflation data is expected this week, which will likely influence the Fed’s outlook on interest rates.
In summary, the recent developments in the U.S. economy, coupled with shifting investor sentiment towards political outcomes, have played a significant role in shaping the current trends in the crypto market. As investors navigate through these dynamic market conditions, staying informed and monitoring key indicators will be crucial for making well-informed investment decisions.