Will Bitcoin Hit an All-Time High Before the Election?

Will Bitcoin hit an all-time high before voters head to the polls?

While Bitcoin has demonstrated its potential to defy expectations, a new set of circumstances, including institutional support, hedge fund interest, and political influences, are converging, making the coming weeks critical for Bitcoin’s price trajectory.

So how high can Bitcoin go?

Key Points

• Major institutions and billionaires are heavily investing in Bitcoin, driving price appreciation, especially with ETF approvals on the horizon.
• The 2024 U.S. election may well shape Bitcoin’s future, with pro-crypto policies boosting its price or restrictive regulations holding it back.
• Bitcoin’s 2024 halving, inflation concerns, and potential central bank digital currencies could be pivotal for its price movement leading up to the election.

The Surge of Institutional Support for Bitcoin

Over the past few years, institutional investors have been flooding into Bitcoin, resulting in a major shift in how the asset is perceived by traditional finance.

Bitcoin has seen substantial backing from institutions like BlackRock, Fidelity, and Vanguard, which have collectively managed trillions of dollars.

BlackRock’s Bitcoin ETF application, filed in mid-2023, was a significant catalyst, sparking speculation that institutional demand will push the price higher over the medium term.

Fidelity has also increased its exposure to Bitcoin through its Digital Assets division, offering institutional clients the ability to buy, sell, and store Bitcoin.

Institutional adoption of Bitcoin suggests to retail investors that the asset is being embraced as a legitimate store of value, akin to gold.

The difference now is that institutional buying is not just speculative but rather many funds are buying Bitcoin as a hedge against potential inflation and fiat currency devaluation.

Big Bets on Bitcoin’s Future

Hedge funds have also been active in the Bitcoin space, with prominent figures like Stanley Druckenmiller, Paul Tudor Jones, and even Ray Dalio warming up to cryptocurrency.

Druckenmiller reportedly holds a significant portion of his portfolio in Bitcoin. Paul Tudor Jones has likened Bitcoin to early-stage tech stocks, calling it “the fastest horse” in the race to hedge against inflation.

Billionaire hedge fund manager Paul Tudor Jones is shorting long duration treasuries.

This is more proof that we’re potentially about to see a 2nd wave of rate raises, like 1968 where interest rates doubled into a recession.pic.twitter.com/VnuF8v9z9p https://t.co/rF59L4uta0

— Financelot (@FinanceLancelot) October 22, 2024

According to a survey by PricewaterhouseCoopers, 47% of hedge funds now allocate to cryptocurrencies, with Bitcoin being the most popular choice.

In addition to direct exposure, hedge funds have been using Bitcoin as a tool for short-term trading strategies, adding volatility to the asset but also liquidity.

Billionaire Backing Is A Key Vote of Confidence

Billionaire support for Bitcoin is growing, with high-profile names from Elon Musk to Michael Saylor and Jack Dorsey all making headlines for their substantial holdings and bullish outlooks.

MicroStrategy, under the stewardship of Saylor, now holds more than 150,000 Bitcoin, worth over $4 billion, after a series of purchases. Saylor has made it clear that he believes Bitcoin will become the dominant store of value in the digital age.

Elon Musk’s Tesla remains one of the largest corporate holders of Bitcoin, with the company owning around $1.5 billion in the digital currency. While Tesla has sold some of its Bitcoin holdings, Musk’s vocal support for cryptocurrency and the potential for future purchases remain key price drivers.

Jack Dorsey’s Square and Block are also betting big on Bitcoin, with Dorsey famously stating that Bitcoin could become the world’s reserve currency by 2030.

Factors Most Investors Don’t Know About

While institutional support and billionaire investments are common knowledge, there are a number of lesser-known factors that could have a significant impact on Bitcoin’s price in the near term. These are the factors that could separate the casual investor from the savvy trader.

One underappreciated aspect of Bitcoin is its hashrate—the total computing power dedicated to securing the network.

After China’s crackdown on Bitcoin mining, the hashrate shifted dramatically, with the U.S. now controlling over 35% of global Bitcoin mining.

A higher hashrate translates to a more secure network, and with the U.S. taking on a leading role, Bitcoin’s future as a secure and decentralized asset looks more promising than ever.

While many investors are aware that Bitcoin regulation remains a contentious issue, few understand the impact that pending legislation could have.

The 2024 U.S. Presidential election will likely play a key role in determining how Bitcoin is regulated in the years to come. The Republican Party has generally been more favorable towards cryptocurrency, advocating for a lighter regulatory touch, while some Democratic leaders have expressed concerns about its use in illegal activities.

The outcome of the election could shape the trajectory of Bitcoin regulation, with either looser regulations that spur adoption or tighter controls that hinder growth.

One looming threat to Bitcoin’s dominance that most investors have not fully accounted for is the rise of Central Bank Digital Currencies. Major economies like China, the EU, and the U.S. are exploring digital currencies, which could pose competition to Bitcoin.

However, proponents argue that CBDCs will only increase Bitcoin’s appeal as a decentralized alternative, free from government control. This dynamic may intensify in the lead-up to the election, particularly if a candidate pushes for CBDC development.

How Politics Will Swing Bitcoin’s Price

The 2024 election may well be pivotal for Bitcoin’s future. As political candidates shape their platforms around key issues like inflation, economic recovery, and technological innovation, cryptocurrency regulation is likely to become a topic of debate.

A pro-crypto candidate in Trump is likely to spur further institutional and retail adoption, while an anti-crypto stance could dampen enthusiasm and create uncertainty.

In addition to regulatory concerns, broader economic policies will affect Bitcoin’s appeal. If the Federal Reserve continues its tightening cycle and raises interest rates, risk assets like Bitcoin may struggle.

The election also ties into Bitcoin’s role as a hedge against economic instability. If the election results in political gridlock or widespread concerns about economic mismanagement, Bitcoin’s status as “digital gold” could drive a flight to safety, pushing its price higher.

Will Bitcoin Hit an All-Time High?

Whether Bitcoin hits an all-time high before the election hinges on several factors, from institutional support to regulatory clarity and macroeconomic trends. Billionaires and hedge funds have already made significant bets on Bitcoin, and with the 2024 election just around the corner, the stakes have never been higher.

If institutional inflows continue, and regulatory developments remain favorable, Bitcoin could surpass its previous all-time high of around $69,000 but the political landscape will play a crucial role.

Should pro-Bitcoin candidates gain power or policies favoring cryptocurrency be enacted, Bitcoin may see a surge in demand.

Conversely, negative regulatory action or tighter monetary policies could slow Bitcoin’s upward momentum.