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Bitcoin jumped above $64,000 for the first time in nearly a month on Monday, sending the share price of major stocks associated with the asset higher as traders take stock of shifting tailwinds.
The world’s largest crypto by market capitalization rose 5.7% to $64,680, reversing losses incurred at the end of last month over fears of Germany’s Bitcoin sales, CoinGecko data shows.
The asset has since dropped back to $64,550 at the time of writing.
U.S. Federal Reserve rate cuts and an evolving political landscape in Washington are helping to fuel investor interest in crypto, Pratik Kala, head of research at DigitalX, told Decrypt.
“If Trump wins, it could boost the crypto market and increase the likelihood of new leadership at the Securities and Exchange Commission,” Kala said.
Inflows to U.S. spot Bitcoin exchange-traded funds, post-halving supply shortages, and the launch of Ethereum spot ETFs next week are also driving up demand, Kala said.
President Joe Biden-appointed SEC Chairman Gary Gensler has been criticized for his approach to policing the industry in what crypto proponents say is a regime of regulation through litigation.
A change of guard at the country’s top regulator could lead to more regulations for crypto and the introduction of new investment options, including a Solana exchange-traded fund, Kala said.
Riding alongside a crypto revival, MicroStrategy’s share price rose 15.3% to $1,611 on Monday, its highest point since June 6, while Coinbase rose 11.4% to $242.
Considered by analysts to be proxies on the performance of crypto, traditional stocks associated with the asset class have loosely tracked Bitcoin’s rise this year.
As a result, mining stocks also saw an uplift on Monday, with Bernstein Research claiming investors are becoming more receptive to shifting perceptions around Bitcoin as an energized power asset.
While interest in crypto-associated stocks has been high, surprises on upcoming figures for U.S. retail sales on Thursday could disrupt market sentiment.
If Trump also loses the election or the market believes his policies will cause further inflation and high interest rates, crypto prices might reverse, Kala added.
“Otherwise, Bitcoin looks like a good setup right now.”
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