Coinbase head of institutional research David Duong said this week, “We predicted that the elections would be a major theme and driving factor in the second half of the year, and that just came a lot sooner than we expected, It’s very likely that’s going to continue playing a part here” As Bitcoin enters one of its typically quieter trading months, investor sentiment remains positive due to recent developments and expected future factors. July, usually a good month for the cryptocurrency, saw Bitcoin rise by 5% to $65,596.41, recovering from a drop in June. Although August has generally seen modest returns, averaging around 2.69%, the strong performance in July and the broader market trends offer a cautiously hopeful outlook. The notable gain in August 2017 suggests the possibility of continued stability or growth.
Political and economic changes play a key role in this optimism. David Duong points out the surprising impact of political events on Bitcoin’s path. Initiatives like Senator Cynthia Lummis’s proposed U.S. Bitcoin reserve and recent support from former President Donald Trump are expected to influence Bitcoin’s future. The launch of U.S. spot Ethereum ETFs and increased political backing for Bitcoin have sparked public debate on U.S. crypto policies, which could lead to higher valuations if industry fundamentals improve.
Looking ahead, macroeconomic uncertainties and technical issues, such as supply from Mt. Gox distributions and locked altcoins, might affect Bitcoin’s trading range, which has varied between $55,000 and $70,000 since March. While immediate forecasts do not predict a breakout above previous highs, analysts like Zach Pandl from Grayscale are hopeful about the potential for new record highs later this year. Bitcoin’s role as a hedge against dollar weakness and its performance amid fluctuating equity markets will be crucial in dealing with the challenges of August and beyond.
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