Former President Donald Trump, once a vocal critic of cryptocurrency, has now embraced the sector. This change comes as crypto becomes a key player in the 2024 presidential election, with significant donations going to a political action committee.
However, Bitcoin's price is rising due to growing support from Donald Trump. Meanwhile, global stocks are struggling because of uncertainty about future company performance.
Bitcoin Thriving Under Trump
The excitement around Trump's new stance grew after a tweet from Dennis Porter suggested that Trump might declare Bitcoin a strategic reserve asset. However, there's speculation that Trump and JD Vance could lead the first crypto-focused presidency and administration.
Meanwhile, Bitcoin's performance over the past month has been impressive, climbing about 11%, significantly outpacing the less than 2% rise in global equities. This rise in bitcoin coincides with Trump's robust rise in the political arena, where he emerged stronger after a televised debate with a struggling President Joe Biden and after surviving an assassination attempt.
Furthermore, Trump is scheduled to speak at a Bitcoin conference on July 27, raising anticipation about his potential crypto policies.
Global Stocks Struggling
Global stocks have been under pressure following a mixed start to the second-quarter earnings season, with investors looking for continued momentum from this year's rally driven by AI and tech firms. Bitcoin's correlation with stocks has turned the most negative since 2023, indicating a significant shift in market trends.
Bitcoin has jumped about 51% in 2024, helped by demand for US exchange-traded funds and Trump's crypto-friendly agenda. In contrast, MSCI's global stock index has only seen a year-to-date gain of about 12%.
Promises and Predictions
Trump has promised to end the “hostility” faced by the crypto industry from Biden's regulators and Democratic lawmakers if he is elected.
Last month, he endorsed Bitcoin, saying it would help the US become “energy dominant.”
On the flip side Sean McNulty, director of trading at Arbelos Market says that, “Bitcoin is now a proxy for a Trump victory.” “For stocks, there are no such clear winners and losers from a Trump trade.”
Meanwhile, Trump's new support for crypto, along with his election plans, has significantly boosted Bitcoin, making its future closely tied to the outcome of the upcoming election.