Bitcoin surged past $64,000 for the first time in nearly a month on Monday, driving up the stock prices of major companies tied to the asset as traders assessed shifting market trends.
According to CoinGecko, the world’s largest cryptocurrency by market capitalization climbed 5.7% to $64,680, reversing losses incurred late last month due to concerns over Germany’s Bitcoin sales.
Pratik Kala, head of research at DigitalX, attributed the increased investor interest in cryptocurrencies to the Federal Reserve’s rate cuts and the evolving political landscape in Washington. Kala stated, “A Trump victory could potentially boost the cryptocurrency market and increase the likelihood of new leadership at the Securities and Exchange Commission.”
Kala also pointed out that inflows into U.S. spot Bitcoin exchange-traded funds, supply shortages following the halving event, and the upcoming launch of Ethereum spot ETFs next week are further driving demand.
SEC Chairman Gary Gensler, appointed by President Joe Biden, has faced criticism for his approach to regulating the industry, which cryptocurrency advocates describe as regulation through litigation.
Kala mentioned that a leadership change at the country’s top regulatory agency could lead to more regulations for cryptocurrencies and the introduction of new investment options, including Solana exchange-traded funds.
In tandem with the cryptocurrency rebound, MicroStrategy’s stock surged 15.3% to $1,611 on Monday, its highest level since June 6, while Coinbase rose 11.4% to $242.
Seen by analysts as a barometer for cryptocurrency performance, traditional stocks linked to the asset class have closely tracked Bitcoin’s gains this year. Consequently, mining stocks also climbed on Monday as Bernstein Research noted that investors are gradually accepting the perception of Bitcoin as an energy asset.
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While interest in cryptocurrency-related stocks remains high, the upcoming U.S. retail sales data, set to be released on Thursday, could disrupt market sentiment.
Kala added that if Trump loses the election or if the market believes his policies will lead to increased inflation and higher interest rates, cryptocurrency prices could reverse.
“Otherwise, Bitcoin seems like a good option right now,” he concluded.
