- Traders look to crypto ‘Trump trade’ to lift flagging bitcoin price
- Bitcoin falls to lowest level since February
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The price of Bitcoin has been falling in recent months. Traders are now looking to a potential “Trump trade” in the crypto markets to help lift prices.
Background on Falling Bitcoin Prices
Bitcoin prices have dropped around 70% from their all-time high of nearly $69,000 in November 2021. The crypto market has been weighed down by rising interest rates, regulatory scrutiny, and a string of scandals.
The collapse of the Terra/Luna ecosystem and hedge fund Three Arrows Capital led to further selling pressure. More recently, crypto lender Celsius Network froze withdrawals, adding to market jitters.
Traders Bet on a “Trump Trade”
Some crypto traders are now betting that Donald Trump‘s Truth Social app could provide a catalyst.
Truth Social is planning to launch an Alternative Trading System (ATS) for digital assets. The ATS would allow users to trade NFTs and other crypto tokens.
Trump’s strong following means Truth Social could quickly gain scale in crypto trading. This potential new source of liquidity is leading some to bet on a “Trump trade” boost for Bitcoin.
Challenges to a Meaningful Price Recovery
However, some analysts are skeptical there will be a sustained bounce. Ongoing macroeconomic and industry headwinds could limit upside for Bitcoin in the near-term.
Rising interest rates are making risk assets less attractive. Regulatory moves are also clouding the outlook for the crypto sector.
For Bitcoin to stage a meaningful recovery, the broader macro backdrop may need to improve. A Trump trade bounce might not be enough on its own to lift prices significantly.
Conclusion
In summary, flagging Bitcoin prices have traders looking for potential catalysts. A new crypto exchange from Trump’s Truth Social is one prospect. But macro hurdles continue to pressure crypto markets. A Trump trade pop might not reverse the broader Bitcoin slump.
