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We all know what a year it’s been for gold – the safe haven yellow metal has, perhaps unsurprisingly, been the net beneficiary of our troubled political times.
But what about that other so-called safe haven asset – Bitcoin?
The price of Bitcoin has recently hit a fresh All Time High (ATH). In the last 24 hours, we’ve seen it hit US$73,464 per ‘coin.’
Expressed as Australian dollars, that’s A$112,323.
Like gold, like the S&P 500, Bitcoin has joined those assets experiencing multiple record highs in 2024. Back in March of this year, Bitcoin did the same when it hit around US$73,100.
As of market close Sydney time on Wednesday, prices have receded slightly to US$72,232 (A$110,440) – which means Bitcoin’s 1Y returns are currently just over +110%, according to CoinMarketCap.
What’s going on?
A large part of that is to do with the fact the U.S. Wall Street regulator Securities and Exchange Commission (SEC) allowed Bitcoin Exchange Traded Funds (ETFs) back in January.
While the market expected an immediate uptick, it would take a month or two – but since mid-late February of 2024, Bitcoin has been above the highs it hit back in the insanity of 2021.
So why the recent surge to reach a new ATH?
Given prices have been raised on ETF availability all year, there’s only one other factor that can explain the recent step-up.
And that, perhaps unsurprisingly, is a belief the now-very-pro-crypto Donald Trump is set to become President of the United States once again.
After all: Bitcoin is a much-watched element of the so-called “Trump Trade.”
But the underlying ETF story – which is attracting institutional investors – is by far the bigger driver, according to Swyftx Lead Market Analyst Pav Hundal.
Politics shouldn’t change much: Swyftx
“Barring some kind of exogenous shock, we’re looking at six figure Bitcoin prices before year-end,” Hundal predicted.
“And that is irrespective of who is in control of the White House.”
When Hundal says that, for Australian readers – he means USD. (US$100,000+ Bitcoin prices mean A$152,870+ in AUD.)
“This suggests institutional appetite for Bitcoin is back on the menu,” he added.
And those institutional investors are going straight for Bitcoin ETFs, rather than necessarily buying straight Bitcoin outright using the ‘crypto wallet’ system.
Bitcoin’s original fan club vs Wall Street
Bitcoin has long been plagued by an intensely conspiratorial fanbase where you can often hear predictions of a collapse in “fiat currency” – in other words, ‘normal money’ – and a lot of that is steeped in Bitcoin’s history.
The grandfather cryptocurrency was, for all intents and purposes, always meant to be a bit subversive. A bit edgy. Or, outright criminal, if you wanted to be more rules-based about it.
Bitcoin’s “decentralised” nature was really just a dogwhistle for dodging tax regulators; its “anonymity” a dogwhistle for the fact Bitcoin was, in its early days, mostly just a very handy way to buy drugs off the darkweb that made it pretty hard to get in trouble.
But since 2014, Australia’s ATO has applied Capital Gains Tax (CGT) to Bitcoin, and, while darkweb vendors’ markets continue to exist, that part of the internet isn’t quite the Wild West of the early 2010’s.
Bitcoin is growing up
A lot of perhaps-less-insane cryptocurrency believers have long been waiting for the asset class to go mainstream. And after an initial bout of interest from Wall Street in 2021, the SEC’s early 2024 decision finally brought that world into reality.
And that’s exactly what we’re seeing now: Bitcoin “growing up,” via spot price ETFs.
Hundal was somewhat hesitant to tie the recent fresh ATH to Trump – after all, “historical data [shows] Q4 typically presents a strong period of positive for momentum for Bitcoin regardless of political outcomes.”
But political outcomes are, clearly, also at play. Especially after Trump’s curious speech at a Bitcoin conference back in late July 2024. (Trump, once a cypto hater, became bullish in May of this year.)
At any rate, Hundal sees more upside.
Predictions of further upside
“Bitcoin ETF demand is adding a fresh layer of momentum, with inflows reaching an impressive US $3.6 billion this month alone,” he said.
“Bitcoin’s surge past $70,000 USD is a strong sign of things to come.
“We’re witnessing a powerful crossover of seasonal trends in our industry and persistent institutional demand as Bitcoin inches closer to new all-time highs.”
BTC Markets’ Crypto Analyst Rachael Lucas also pointed to ETF inflows as the main driver.
“Bitcoin’s recent climb … marks a significant milestone, reflecting growing interest from large financial institutions and increasing mainstream acceptance of digital assets,” Lucas said.
“However, BTC Markets’ trading volumes remain below 2021 peaks, suggesting retail investors remain cautious, awaiting regulatory clarity and post-U.S. election stability that could bolster demand and drive further price gains.”
Time will tell.
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The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
Disclaimer: HotCopper had a relationship with Swyftx at the time this was written.
