Introduction: Talking about cryptocurrency from the American election
The encryption market is increasingly influenced by the US presidential election. From the accelerated approval of the spot ETF of Ethereum to the recent deviation of the encryption market from the trend of US stocks, it all shows that the new presidential candidate in the United States has become a weather vane for encryption investors.
Since Polymarket predicted that the probability of Harris being elected exceeded Trump for the first time, the encrypted market has experienced dramatic ups and downs. By the end of August 20th, BTC had dropped from the position of $62,000 to the mark of $56,000, experienced four ups and downs of $60,000, and finally broke through the barrier and stood at $60,400.
Some forces are obviously preventing bitcoin from rising, and the current US government does not seem to want the bitcoin market to recover faster. The main reason behind this is that the Democratic Party, represented by Harris, does not want to see bitcoin prices rise, because it will enhance the support rate of rival Trump.
September is worth looking forward to, and cryptocurrency may usher in explosive growth
The global financial market, especially the cryptocurrency market, is at a key historical node. September is expected to be an important turning point in the cryptocurrency market and even the global financial market, with the US government launching a plan to buy back US$ 50 billion of government bonds and the strong market expectation that the Federal Reserve may cut interest rates urgently. This series of policy measures not only aims at stabilizing the economy, but also injects new vitality and hope into the cryptocurrency market.
The U.S. government’s $50 billion national debt repurchase program began in August and gradually increased to $31.5 billion in September, and finally ended with $10 billion in October. The core of this plan is to reduce the supply of government bonds in the market by repurchasing old government bonds with low yield and poor liquidity, thus stabilizing bond prices and controlling yield. Different from the direct printing of money by the Federal Reserve, although the repurchase of government bonds does not directly create new money, it effectively increases the liquidity of the market through the redistribution of funds.
This move is undoubtedly a positive signal for the cryptocurrency market. Liquidity is the cornerstone of the prosperity of financial markets, especially cryptocurrency markets. More liquidity means that investors have more funds to invest, including cryptocurrencies with high risks and high returns. Therefore, the national debt repurchase plan is expected to bring a new wave of capital inflows to the cryptocurrency market and boost market confidence.
On the other hand, the market’s expectation that the Fed may cut interest rates urgently is also increasing. CME Fed observation tools show that the possibility of cutting interest rates by 50 basis points in September is as high as 74.5%, and the possibility of cutting interest rates by 25 basis points is also 25.5%. Although some experts warn that an emergency interest rate cut may aggravate economic problems and lead to market collapse, most analysts believe that interest rate cuts will effectively stimulate economic growth and further increase market optimism.
Interest rate cuts mean that the cost of capital will be reduced, and investors’ demand for investment channels with higher returns will increase. Cryptographic currency is often one of the first choices for investors in the interest rate reduction cycle because of its high volatility and potential high return. Therefore, the expected interest rate cut will undoubtedly provide additional upward momentum for the cryptocurrency market.
All financial measures are not achieved overnight, and the feedback from the market is the best proof. From Bitcoin, we can see that the circulation of stable currency is increasing, especially after the flash crash of Bitcoin to $49,000, we have seen an obvious acceleration trend, with four consecutive rallies and falls, and there is still room to launch the fifth impact, which also well indicates the rebound of global liquidity, thus promoting the rise of Bitcoin.
No matter from the actions of long-term holders, stabilizing the circulation supply of coins, and the trend of global M2 money supply, we all see that a positive trend is being established, not that Bitcoin will skyrocket immediately, but more of a long-term or cyclical trend.
Facing the coming September, how should investors in the cryptocurrency market seize the opportunity?
For investors, the current market environment is full of opportunities and risks. Faced with the uncertainty after the price of Bitcoin broke through $60,000, investors should remain rational and avoid making irrational investment decisions driven by FOMO emotions.
· Long-term investors: For investors who are optimistic about the prospect of Bitcoin for a long time, they can consider continuing to hold it and buying it on dips when the price is adjusted back.
· Short-term traders: For investors who prefer short-term trading, it is recommended to pay close attention to market sentiment and technical indicators, and be cautious after excessive price increases to avoid chasing high prices.
No matter which strategy you choose, risk management is always the key to successful investment. In the context of changing global economic and policy environment, maintaining flexible investment strategies will help to cope with various challenges in the future market. September is coming, are you ready for the explosive growth of cryptocurrency market?
