Bitcoin says yes to $64,000 question
Crypto warms up amid global tensions and US election fever
Crypto markets kicked off the week in a bullish mood despite the Columbus Day holiday in the US, with Bitcoin, Ethereum and Solana all gaining in today’s morning session. The rally was strongest for Bitcoin, which rose back above $64,000.
The news that MT Gox’s payment deadline had been pushed back to October 31 was one factor, easing fears of a forced sell off and a flood of crypto supply, but the increasingly febrile US election campaign and wider geopolitical tensions also played a role.
More details emerged at the weekend of China’s stimulus package, aimed at shoring up its fragile economy and troubled real estate sector. Meanwhile, Russia’s asset swap scheme – designed to free up assets frozen by western governments – sold a further 2.54 billion Rubles ($26.51 million) worth of securities to non-resident investors.
Donald trumping Kamala?
The outcome of the US presidential election remains one of the biggest single unknowns in global markets. According to the latest poll from Polymarket, Trump pulled ahead with 54% compared to Harris’ 46%.
Some market analysts view a Trump win as potentially positive for crypto markets, but it is worth noting that leading figures in crypto are far from unanimous in their support for Trump. It emerged over the weekend that Ripple Labs co-founder Chris Larsen had donated $1 million worth of XRP cryptocurrency to a Democrat PAC backing the Harris/Walz campaign.
As the November election looms ever closer, the outlook for the US economy continues to be unclear. Economists are predicting growth to slow in the final quarter and markets are currently pricing in a potential 50 bps cut from the US Federal Reserve before the year end, which might be expected to put pressure on the greenback.
Fiat volatility set to grow
Beyond the presidential election, the US dollar also remains sensitive to global market conditions. The Euro-US Dollar exchange rate is testing a two-month low, trading near 1.09 as markets await the imminent monetary policy decision from the European Central Bank on Thursday.
Meanwhile, Cable (GBP/USD) remains range-bound between $1.3050 and $1.3100 to the Pound Sterling as markets await the UK’s latest CPI data on Thursday. The newly installed UK Labour Government is also setting out its stall to investors this week with an International Investment Summit in London. A row over critical comments made by a minister regarding P&O Ferries grabbed the headlines, but the more important news will be whether the Government can provide substantial evidence of a more investor-friendly UK.
Despite the uncertainty surrounding November’s US election, the US Dollar has maintained its status as a safe haven. However, we expect volatility to increase as the election date nears and, on the BCB trading desk, we have noted strong flows to the Mexican Peso, the Turkish Lira, and the Israeli Shekel.
The last of these is particularly noteworthy, given the growing tensions in the Middle East over the weekend, which saw a Hezbollah strike in Israel kill four and injure 60, along with Israeli strikes on UN positions in southern Lebanon.
Mining for Bitcoin… in rubbish tip
On a lighter note, UK investors received a fresh reminder of the risks of not having secure storage for crypto assets as a man in Wales launched a £500 million lawsuit against his local council.
A man in Wales accidentally threw away a hard drive containing about 8,000 bitcoin and has been pressuring Newport City Council to allow him to excavate a landfill site with the aim of recovering his digital assets.
Rarely has there been a better advert for using a third party secure crypto wallet.
Brought to you by the BCB Trading Team
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