Cryptocurrencies, and primarily Bitcoin, are currently experiencing a period of rapid growth. After the victory of Donald Trump in the US presidential election, the Bitcoin rate confidently went up and reached record values above $93,000. However, the growth of cryptocurrencies was observed throughout the year and was due to a number of other factors.
Strong political support
Of course, the main reason for the rapid growth of cryptocurrencies in recent days was the election of Trump as the next US President. In his election rhetoric, he repeatedly promised support for the crypto industry and American mining companies. In particular, he promised to turn the United States into the “crypto capital of the planet,” as well as to massively introduce digital finance. “If the future is going to be defined by cryptocurrency, I want it to be mined, minted and produced in the United States,” Trump said at one event. It is expected that under the new administration, the US authorities will take a more loyal position towards cryptocurrencies.
Even during the election campaign, Trump began to surround himself with supporters of cryptocurrencies, including figures such as Elon Musk and Howard Lutnick, who is associated with the company Tether, and David Bailey, the head of Bitcoin, acts as a consultant to Trump Magazine, one of the oldest publications about cryptocurrencies. It is also expected that the post of vice president under Trump will be taken by JD Vance, who is also a supporter of cryptocurrencies. In addition, more than 250 crypto-industry-friendly candidates were elected to the US Congress, and the main opponent of cryptocurrencies among legislators, Senator Sherrod Brown, lost his post.
Trump also vowed to “first fire” SEC Chairman Gary Gensler, who under Biden led a crackdown on many of the major cryptocurrency companies. Instead of Gensler, more industry-friendly candidates are being considered to head the SEC, such as Daniel Gallagher and SEC Republicans Hester Pierce and Mark Uyeda.
The promises didn’t end there. On the evening of November 12, Trump announced that Elon Musk and former Trump rival in the primaries Vivek Ramaswamy would head the new Department of Government Efficiency in the US government (D.O.G.E.). This structure will reduce government spending, eliminate excessive regulation, and will also reform bureaucratic structures to increase the efficiency of the state apparatus.
With Trump coming to power in the United States, it is also planned to adopt a number of laws that should have a positive impact on the cryptocurrency market. According to Coinbase chief lawyer Paul Grewal, a bill is already in Congress to provide investor protection and “remove some of the ambiguities” in regulating the cryptocurrency market.
Historically, US presidential elections coincide with periods of Bitcoin growth. In 2016, cryptocurrency rose in price by 35% before the elections and by 125% after them. In 2020, the increase was 34% before the election and 307% after. This time the pre-election increase was 10%.
Thus, the rise to power of Donald Trump became a powerful catalyst for the rapid growth of cryptocurrencies. Investors took this as a signal that the crypto industry will receive favorable conditions for development under the new administration, and so far Trump, with his actions and decisions, has only strengthened this confidence.
Third party factors
The current year as a whole has been very successful for Bitcoin. The first cryptocurrency has been growing since the beginning of the year after US regulators approved spot Bitcoin ETFs. For the first time after years of refusals, the Securities and Exchange Commission (SEC) gave the green light to launch such funds. This opened up access to cryptocurrencies to a wide range of investors through traditional financial instruments.
In the first month after launch, the assets of the nine largest spot Bitcoin ETFs exceeded 200,000 bitcoins, or $9.5 billion. By May 2024, these funds managed $90.6 billion worth of coins—about 5.27% of all existing bitcoins. This influx of institutional investments has become a powerful driver of cryptocurrency growth.
Many large financial corporations have recently begun to actively increase their cryptocurrency assets. Thus, MicroStrategy, the largest public corporate holder of bitcoins, bought about 27,200 BTC worth $2 billion from October 31 to November 10. This allowed the company to increase its cryptocurrency balance to 279,420 bitcoins, or $24.7 billion. Another factor contributing to the growth of the cryptocurrency market was the victory of cryptocurrency companies in legal proceedings against the US Securities and Exchange Commission. The court’s decision in favor of Ripple Labs clarified the situation with the application of securities laws to cryptocurrencies and showed that confrontation with the regulator is possible. This strengthened investor confidence in the prospects of the cryptocurrency industry and its ability to defend its interests in the legal field. Victories in the courts have demonstrated that the crypto industry is becoming more mature and capable of protecting its rights.
Another important factor in the growth of Bitcoin, like many other cryptocurrencies, was the reduction in interest rates by the US Federal Reserve. Lower rates make alternative assets such as cryptocurrencies more attractive to investors compared to traditional financial instruments. In an environment of low rates, cryptocurrencies become more competitive, which stimulates the flow of capital into this market. Investors looking for higher returns are turning to crypto assets, which pushes their prices higher.
Positive signals for the future
According to technical analysis, Bitcoin has significant potential for further growth in the coming months. The Relative Strength Index (RSI) is at 60, well below previous bull market highs. This indicates continued opportunities to continue the upward trend.
Analysts at Copper.co predict that Bitcoin’s price peak in the current growth cycle could be reached in late May or early June 2025. This is due to the fact that the average duration of previous Bitcoin growth cycles was about 756 days, and the current cycle has already lasted 554 days.
Thus, technical indicators also signal continued opportunities for further growth in the Bitcoin rate and the entire cryptocurrency market. If favorable conditions continue, experts predict that in 2025 the Bitcoin rate could reach new historical highs – some predict a Bitcoin rate of $320,000.
In conclusion, we add that Bitcoin’s capitalization has reached $1.82 trillion. Just yesterday it overtook the silver market and took eighth place in the ranking of the world’s largest assets. And today Bitcoin has risen to seventh place, leaving behind the largest oil company Saudi Aramco.