During the past week, political events and strategic decisions made by major companies significantly impacted the dynamics of digital assets, reports a correspondent from the Kapital.kz business information center.
The rise in Bitcoin's value was influenced by expectations that Republican candidate Donald Trump would assume the presidency of the United States. This conclusion was reached by specialists from Bernstein. Analysts noted a high correlation between the leading cryptocurrency and the likelihood of the former White House chief defeating Democratic candidate Kamala Harris. According to Polymarket, the odds of such an outcome increased to 56.6% by the end of the reporting period. This was the highest figure recorded since late July. "Although both candidates expressed support for digital assets, bets in the cryptocurrency market significantly increased amid Donald Trump's success in the presidential race," the experts commented. Analysts also pointed to a 78% chance of Republicans winning in the Senate and a 39% probability of them gaining a majority in both chambers of Congress. They believe that shares of MicroStrategy served as a key indicator of a potential bullish breakthrough. Since the beginning of the year, the stock of the Bitcoin company has risen by 191%, while "digital gold" increased by 55%. "MicroStrategy took advantage of low prices by issuing shares and convertible debt to replenish reserves in the first cryptocurrency and was rewarded for this," the report stated. The company's stock peaked in March of this year before entering a multi-month correction phase. Unlike Bitcoin, the quotes have already emerged from a sideways trend and continued to accelerate, analysts explained.
Standard Chartered highlighted the prospects for Bitcoin to return to its historical maximum before the U.S. elections. The main drivers identified by specialists included: increasing chances of Donald Trump winning; a significant influx of funds into spot Bitcoin ETFs; and heightened activity in call options. Experts also noted the steepening of the U.S. government bond yield curve, which they believe signaled an increase in market volatility and a heightened demand for alternative assets like Bitcoin. Standard Chartered explained that the digital asset ecosystem is increasingly integrating into the traditional financial system. Growing acceptance in this environment, along with favorable political events, could become a positive factor for Bitcoin in the coming months. In the event of Donald Trump's defeat, "the broader trend towards cryptocurrency adoption will remain unchanged." Analysts also noted MicroStrategy's potential to generate a new stream of income through lending in "digital gold." Currently, the company has acquired 252,220 BTC, including 7,420 BTC in September. MicroStrategy could transform into a "Bitcoin bank," offering capital market products, including common, convertible, preferred stocks, and fixed-income instruments.
The company itself, as analysts noted, has announced grand plans for the future. MicroStrategy's ultimate goal is to transform into a leading Bitcoin bank with a market capitalization of $1 trillion. This was revealed by the company's founder, Michael Saylor, in an interview with Bernstein. The business analytics software provider began increasing its balance of the first cryptocurrency in August 2020. The latest acquisition of 7,420 BTC, reported in September, brought the total volume of its crypto reserves to 252,220 BTC. The assets reached approximately $15.5 billion, making MicroStrategy the largest corporate holder of Bitcoins in the world. The company has spent a total of $9.9 billion on purchasing digital currency. According to Michael Saylor, the first cryptocurrency has become "the most valuable asset in the world," and its use would allow his company to transform into a trading bank or financial institution. This transformation would involve creating instruments for Bitcoin capital markets in the form of its own shares, convertible bonds, and other securities. In September, Michael Saylor provided data indicating that over four years of implementing the digital gold accumulation strategy, MicroStrategy's stock performance nearly tripled its returns. The entrepreneur confirmed that he sees a real opportunity to build a company with a 100% premium to Bitcoin, reaching a valuation of $300-400 billion, offering investors access to the largest options and stock markets. "And then we will primarily delve into fixed-income segments and just continue to buy more Bitcoins. It will rise to millions per coin, and we will reach a trillion," Michael Saylor shared with senior Bernstein analyst Gautam Chhugani. The founder of MicroStrategy is confident in the company's capabilities and continues to secure debt financing for purchasing digital gold.
Considering his forecast of an average annual return of 29% for the cryptocurrency, this would allow the continuation of an arbitrage strategy in the Bitcoin capital market. "I believe it is much wiser to borrow $1 billion in the fixed-income instrument market and invest it in Bitcoin at 50% annually without counterparty risk than to look for someone willing to pay me 12-14%," he emphasized. Despite a recent forecast from Benchmark analysts about the potential launch of MicroStrategy's lending in cryptocurrency, the entrepreneur categorically denied such a scenario. According to him, it was less profitable and riskier than providing instruments for indirect investment in Bitcoin. "Instead, we assumed that a better idea would be to borrow $10 billion from people who would gladly lend and give them 100 basis points more in returns, then invest in Bitcoin at 30-50% annually," Michael Saylor said.
JPMorgan presented its forecasts regarding the drivers of cryptocurrency growth until the end of the current year. The potential return of Donald Trump to the presidency of the United States and the need for insurance against economic instability created favorable prospects for Bitcoin in 2025, they stated. According to analysts, against the backdrop of rising geopolitical tensions and the upcoming elections in the U.S., speculative institutional investors might consider gold and the first cryptocurrency, but not Ethereum. A potential victory for Donald Trump, in addition to supporting Bitcoin from a regulatory standpoint, would likely increase turbulence due to plans for tariff hikes and increased government spending ("devaluation of debt"), JPMorgan analysts believed. According to specialists, stock and bond markets underestimated the prospects of the Republican candidate's return to the White House. Other factors included statements from Morgan Stanley and other investment firms allowing them to recommend spot Bitcoin ETFs to clients; the disappearance of pressure from the liquidations of Mt. Gox and Genesis, as well as coin sales by the German government; and fiat payouts to FTX customers following the completion of the bankruptcy process. Analysts also noted a rise in the capitalization of stablecoins to $180 billion, which was observed before the collapse of Terra/Luna. "Overall, we have adopted an optimistic outlook for digital assets until 2025," they summarized in the report. Analysts maintained a conservative view on the medium-term outlook. They reminded that the current price of the first cryptocurrency still exceeded the average mining cost of $47,000 and the volatility-adjusted level compared to gold of $63,000.
Amid increasing political uncertainty and the growing integration of digital assets into traditional financial systems, Bitcoin demonstrated steady growth and attractiveness for investors. Support from major corporations such as MicroStrategy, along with positive forecasts from leading financial institutions, indicated the ongoing legitimacy and potential of the first cryptocurrency. Despite persistent volatility and conservative assessments from analysts, Bitcoin's prospects appeared promising, especially considering possible political changes and further integration of digital assets into the global economy.
At the end of the past seven-day reporting period, the total capitalization of the cryptocurrency market showed a slight increase. As of the evening of Wednesday, October 16, 2024, it amounted to $2.18 trillion, which is 0.46% higher than the values recorded at the end of the previous reporting period.
1. Bitcoin (BTC). As of the evening of Wednesday, October 16, 2024, the price of "digital gold" managed to rise above $67,000. Over the week, Bitcoin confidently tested the resistance line at the $68,000 mark, but by the end of the reporting period, it slightly retreated below it. The increase for the reporting period was 7.79%. The price settled at $67,357. Bitcoin's market capitalization rose by $104 billion, reaching $1.331 trillion. The share of the "first cryptocurrency" in the total market capitalization increased by 0.7 percentage points, totaling 57.4%.
2. Ethereum (ETH). As of the evening of Wednesday, October 16, 2024, the price of "Ether" showed significant growth. Following Bitcoin's lead, "digital oil" managed to return above the important psychological mark of $2,500. Over the week, Ether increased by 7.07%, reaching $2,617. The share of Ethereum (ETH) in the total cryptocurrency market capitalization rose by 0.11 percentage points, totaling 13.61%.
3. Binance Coin (BNB). As of the evening of Wednesday, October 16, 2024, the price of BNB stood at $594. For the reporting period, the price of the cryptocurrency increased by 1.85%. The share of Binance Coin (BNB) in the total cryptocurrency market capitalization decreased by 0.19 percentage points,