Bitcoin Set To Gain From Rising Hashrate Inflation Fears And Crypto-Friendly President

Bitcoin's imminent price recovery will be fueled by several distinctive factors.

Source: decrypt.co

Bitcoin fell by 4.1% between October 21 and 22 after encountering resistance at $69,500. This correction erased the gains made in the previous week, prompting traders to wonder if the $67,000 level can be regained and what factors could support a price rebound. The S&P 500's decline since its all-time high on October 18 likely made Bitcoin investors more cautious. However, the primary factors contributing to the stock market's pullback are generally positive for alternative assets. For example, gold reached an all-time high on October 22.

Bitcoin Will Thrive Regardless of The US Presidential Election Results

Billionaire hedge fund manager Paul Tudor Jones stated on CNBC on October 22 that the US government will continue down an inflationary path regardless of who occupies the White House. In this context, Tudor Jones recommends investing in gold and Bitcoin, noting that most investors are ridiculously underexposed to commodities.

He predicts that the US public deficit will exceed current budget forecasts, leading to rising yields on longer-term Treasuries, as the US will ultimately try to inflate its way out. While a stock market crash is not imminent, significant devaluation of the US dollar could occur. Although this isn't the first time Tudor has praised Bitcoin's potential, reaffirming his position while BTC hovers around $69,000 sends a strong message. The sharp increase in the US 10-year Treasury yield indicates growing skepticism about the Federal Reserve's ability to achieve a soft landing.

Despite rising macroeconomic uncertainty, the fundamentals for a sustainable Bitcoin rally remain strong. For instance, the increasing demand for gold, even as tech companies report record earnings, underscores a lack of confidence in the stock market. Gold, traditionally seen as a hedge, shares this important value proposition with Bitcoin. While it's impossible to predict the outcome of the US presidential election, Kristin Smith, CEO of the Blockchain Association, believes that the incoming US Congress will be the most crypto-friendly in history, noting many first-time candidates entering positions on crypto. Moreover, there seems to be a growing number of lawmakers and policymakers willing to engage in discussions about digital assets.

Bitcoin Set To Gain From Rising Hashrate And Growing Investor Interest In Alternative Assets

The strong demand for Bitcoin exchange-traded funds (ETFs) further enhances the likelihood of BTC reclaiming the $67,000 level. Since October 11, these funds have attracted $2.68 billion in net inflows, bringing total assets under management to $51.7 billion, according to data from Investors.  Additionally, the continuously increasing estimated Bitcoin hashrate, which measures the total processing capacity used by the network’s validators, indicates that miners remain optimistic about the mid to long-term outlook. A higher hashrate reflects significant investments in ASIC mining equipment, which typically requires 18 months or more to become profitable. With reduced short-term selling pressure from miners, Bitcoin is better positioned to regain its bullish momentum and establish $67,000 as a support level.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.