Experts say these four factors are driving Bitcoin’s rally. Will it break $70,000 in July?

After a bearish start to the summer, Bitcoin is bouncing back in what analysts say is the start of a new rally.

“The set up for the next leg higher for Bitcoin looks compelling,” David Brickell, head of international distribution at FRNT Financial, and former forex trader Chris Mill, wrote in their latest “Connecting the Dots” newsletter.

Still, Bitcoin may take some time before it breaks the $73,700 record set in March.

Here are the four factors that will drive that rally.

Donald Trump

Noelle Acheson, former head of market insights for Genesis Global Trading, wrote in her “Crypto is Macro Now” newsletter how a Trump presidency — which is looking more likely — would boost the price of Bitcoin.

The odds of a second Trump term skyrocketed after an assassination attempt on Sunday, according to crypto betting site Polymarket.

Trump has positioned himself as a pro-crypto candidate after having previously called Bitcoin “a scam against the dollar.”

Industry stakeholders said they hope Trump will oust Securities and Exchange Commission Chair Gary Gensler — who is an outspoken crypto critic — and introduce a more crypto-friendly agency head.

Washington’s attitude

Trump is not the only one that has changed his tune on crypto.

“Crypto has faced outright hostility from Washington in recent years, hamstringing industry growth,” Matt Hougan, chief investment officer at Bitwise, wrote in a recent investor note.

“But in one of the most stunning developments of the past few months, attitudes have changed sharply.”

With both Democrats and Republicans voting for laws seen as pro-crypto.

“This is a game-changer,” Hougan said, adding that he has “never seen a better long-term setup for crypto than right now.”

He said it was one of the factors that could catapult Bitcoin to $100,000 by the end of 2025.

Federal Reserve

Confidence in a new all-time high has surged in tandem with the US central bank signalling inbound interest rate cuts.

Federal Reserve Chair Jerome Powell said on Monday that recent inflation data over the second quarter has bolstered “confidence” that the economy is returning back to the central bank’s targets.

That has raised the odds of interest rate cuts in September, a bullish signal for riskier assets like stocks and cryptocurrencies.

“This is go time,” Brickell and Mill said.

Miners pivot to AI

AI will drive Bitcoin to $200,000 by the end of 2025, according to Bernstein analysts.

In a research note last week, they said that Bitcoin miners that accommodate the burgeoning data demand for artificial intelligence would help keep the price of Bitcoin from falling.

Instead of selling their Bitcoin holdings, they can tap a new revenue stream in AI companies, says Bernstein.

Germany and Mt. Gox

JPMorgan analysts blamed the recent slump on the German government’s liquidations of some $2 billion of Bitcoin in recent weeks.

Similarly, collapsed crypto exchange Mt. Gox kicked off distribution of $8.2 billion in Bitcoin to creditors.

Both those factors risk weighing on the price as more supply amidst unchanged demand translates to falling prices.

“The market expects most Mt. Gox users dump their tokens, but we might see a bounce back if the selling is lower than anticipated,” Rachel Lin, co-founder and CEO of SynFutures, a decentralised crypto derivatives exchange, recently told DL News.

Brickell and Mill suggested that much of this risk “will have been hedged and the other Mt Gox hodlers will continue to hodl,” which could cushion the impact.

Whatever the effect of these liquidations, it will subside by July, JPMorgan said, which is why the firm expects a rebound in August.

When will Bitcoin break its record?

Bitcoin hit its all-time high of $73,700 back in March.

Polymarket places the odds of Bitcoin climbing past $75,000 in July at just 12%.

Crypto market movers

• Bitcoin is up 2% over the past 24 hours to trade at $64,350.
• Ethereum is up 1.8% to $3,430.

What we’re reading

• Circle CEO says EU’s MiCA crypto law ‘introduces a lot of bank risk’ — DL News.
• Mt. Gox Moves Nearly $9 Billion In Bitcoin, BTC Price Reacts — Milk Road.
• Spot Ether ETFs to Start Trading on July 23: Report — Unchained.
• Chainalysis Highlights Rising Usage Of Crypto For Money Laundering — Milk Road.
• Here’s where Trump VP pick JD Vance stands on crypto — DL News.

Eric Johansson is DL News’ News Editor. Got a tip? Email at [email protected].

by dlnews