Bitcoin Faces Hurdles Amid November 2024 U.S. presidential election saw Bitcoin increase 45%, but its latest rally met difficulties. Experts attribute these issues to President-elect Trump’s cryptocurrency ambivalence. Trump’s economic plans increase uncertainty. Market volatility persists despite Bitcoin’s growth. Many investors are wary of these risks. Trump’s crypto attitude is ambiguous. Bitcoin’s future stability is questioned. Market risks overshadow Bitcoin’s advances. Market volatility persists with cryptocurrencies. Trump’s policies may affect Bitcoin’s future.
Trump’s Economic Policies’ Effect on Bitcoin
President Trump’s suggested economic policies, especially his proposal to impose universal tariffs, are one of the main issues affecting the Bitcoin surge. In order to impose tariffs, Trump has alluded to a national economic emergency, which might put a lot of pressure on the market’s inflation rate. The stability of Bitcoin and other digital assets may then be impacted. A significant obstacle for Bitcoin at the moment is the stronger-than-expected U.S. dollar, according to Zach Pandl, head of research at Greyscale Investments. Bitcoin Faces Hurdles Amid The strength of the dollar, which tends to exert downward pressure on risky assets like Bitcoin, is a result of the Federal Reserve’s recent monetary policy announcements.
Federal Reserve and Its Impact
The monetary policy of the Federal Reserve has a significant impact on the price of Bitcoin. Following robust payroll numbers in December 2024, there are growing concerns that the Fed might not lower interest rates as anticipated. Riskier assets, such as Bitcoin, lose appeal when interest rates rise. The performance of Bitcoin is becoming more challenging due to this cautious approach. Because of the uncertainty surrounding Trump’s economic approach and the Fed’s policies, cryptocurrencies, including Bitcoin, are seeing heightened volatility.
Market Expectations and Pro-Crypto Law
Experts warn that major legal reforms in favour of cryptocurrencies may not happen anytime soon, despite early optimism about a more crypto-friendly atmosphere under Trump’s administration. Although most people view Trump’s position as pro-business and in favour of digital assets, analysts predict that Congress will soon turn its attention to more urgent concerns. Crypto enthusiasts should thus not anticipate quick regulatory changes that would have a big effect on the market. Although crypto legislation will eventually be addressed, analysts like Kenneth Worthington of JPMorgan think that rapid improvement is unlikely.
Investor Attitude and Market Volatility
Bitcoin’s price has fluctuated in recent weeks, suggesting cryptocurrency market anxiety. Bitcoin plummeted below $97,000 after peaking above $102,000. This substantial change has led many market participants to review Bitcoin’s performance, focussing on political and economic reasons. The regulatory landscape after former President Donald Trump’s attitude on cryptocurrencies is a major worry. The rising U.S. dollar seems to be devaluing digital assets like Bitcoin. These challenges are forcing cryptocurrency investors to rethink their plans, making the market more uncertain.
Prospects for Bitcoin in the Long Run
Experts are cautiously hopeful about Bitcoin’s long-term prospects despite the short-term difficulties it faces. While the cryptocurrency may see turbulence in the immediate future, its structural tailwinds are still in place, according to Alex Thorn, head of research at Galaxy Digital. The cryptocurrency’s long-term outlook is supported by elements like rising institutional interest, wider adoption, and its ability to operate as an inflation hedge. According to Thorn, once the overall state of the economy stabilises, Bitcoin may recover and continue to rise.
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Conclusion
In conclusion, the US dollar’s strength and President-elect Trump’s altering economic policies are hindering Bitcoin’s rise, but the cryptocurrency market is expected to overcome them. Investors should monitor how Trump’s economic policies and the Fed’s attitude affect interest rates. Even though the short-term outlook is uncertain, Bitcoin’s long-term prospects are good due to rising institutional interest and adoption. Bitcoin remains strong in the global financial system as it adapts.
