Key Points
- Donald Trump’s support for Bitcoin is causing a divergence from global equities.
- The Bitcoin price is under pressure, dropping below $66,500 amid strong BTC distribution to Mt. Gox creditors.
Donald Trump’s growing support for Bitcoin and the wider crypto market is causing a notable divergence from global equities.
According to a report by Bloomberg, the 30-day coefficient of Bitcoin and the MSCI index for global equities is trending towards minus 0.20. This is unusual as the measure has generally remained positive since 2020. A reading of 1 indicates that Bitcoin and global equities are moving together, while a -1 reading suggests they are moving in opposite directions.
Global Stocks and Crypto
Global stocks are experiencing some strain following a mixed beginning to the second-quarter earnings season. Investors are looking for evidence that the year’s rally, driven by artificial intelligence and technology firms, can persist.
Throughout his recent Presidential campaign, Donald Trump has been a vocal supporter of Bitcoin and the broader crypto market. He has also pledged to back the Bitcoin mining industry if he returns to power. In a further outreach to the crypto industry, Trump is set to appear at the upcoming Bitcoin Conference 2024.
Betting markets favor the Republican nominee for the upcoming November election, bolstering Bitcoin in anticipation of a more crypto-friendly US regulatory environment. Sean McNulty, director of trading at Arbelos Markets, stated, “Bitcoin is now a proxy for a Trump victory. For stocks, there are no such clear winners and losers from a Trump trade.”
Meanwhile, Vice President Kamala Harris is attempting to bridge the gap with the crypto industry. It is reported that Harris will also appear at the Bitcoin conference, although her office has yet to confirm this.
Bitcoin Price Trends
With the substantial BTC distribution to Mt. Gox creditors, the Bitcoin price has encountered selling pressure, dropping below $66,500. CryptoQuant CEO Ki Young Ju reported no significant increase in hourly spot trading volume or Bitcoin outflows on Kraken since then. While the Asian trading session needs monitoring, the current signs are positive.
CryptoQuant mentioned that $66,500 remains a critical support zone, which has been the average purchase point for BTC holders over the last three months. If the BTC price fails to recover this, it could further drop to $63,600.
