Bitcoin is once again capturing the attention of global markets as it inches closer to the $70,000 mark. This upward momentum is unfolding as investors keep a close eye on the upcoming U.S. presidential election, now just two weeks away.
The world’s leading cryptocurrency surged to a high of $69,450 early Monday morning, before retreating to $68,600 at the time of this writing. Earlier this year, in March, Bitcoin reached its all-time high of over $73,700, and the current rally is approaching that milestone once again, with the $70,000 level seen as a key resistance level.
U.S. Election as a Market Catalyst
The upcoming U.S. presidential election is playing an increasingly prominent role in driving market movements, including Bitcoin’s price action. Investors are gauging the potential impact of the election outcome on financial markets, particularly with regard to policies that could affect digital currencies.
As the former president campaigns for another term, he’s been actively courting the crypto community, promising to turn the U.S. into the “crypto capital of the planet.” Part of Trump’s campaign also includes creating a “strategic national Bitcoin stockpile,” similar to the U.S. gold reserves. This is a massive shift from his stance three years ago, when he famously called Bitcoin something that “just seems like a scam” and suggested it was a threat to the U.S. dollar.
Polling data is presenting a mixed picture though. On the prediction platform Polymarket, former president Donald Trump holds a 21% advantage over Vice President Kamala Harris, with his odds of winning currently estimated at about 60%. On the other hand, FiveThirtyEight’s traditional polling data shows a closer race, with Harris narrowly leading Trump by 1.8%, holding 48.2% of the projected vote.
Seasonal Trends and Growing Demand Boost Bitcoin’s Outlook
Another factor contributing to Bitcoin’s current rally is its strong historical performance in the fourth quarter, particularly during bull markets and halving years. Bitcoin has shown significant gains in Q4 during past halving years, which occur when the reward for mining Bitcoin is reduced, lowering the rate of new Bitcoin entering the market.
As a recent CryptoQuant analysis notes, in the 2012, 2016, and 2020 halving years, Bitcoin’s price increased by 9%, 59%, and 171%, respectively, during the fourth quarter.
“So far Q4 2024, Bitcoin is behaving very similar to 2016 and 2020,” reads the report.
On top of that, the research notes that demand for Bitcoin has started to surge again after a relatively quiet period since May. Last week, Bitcoin saw a sharp rise in apparent demand, with monthly growth reaching 177,000 Bitcoin, the highest level recorded since late April.
Source: CryptoQuant
According to CryptoQuant, “apparent demand” for Bitcoin is defined as the difference between production, which refers to the amount of Bitcoin mined, and changes in inventory (the supply of Bitcoin that has remained inactive for over a year). When inventory decreases at a rate higher than the production of new Bitcoin, it indicates rising demand. Conversely, if inventory grows or stays constant while production continues, demand is seen as declining.
One major driver of this demand is the renewed buying activity from spot Bitcoin ETFs (exchange-traded funds) in the U.S. These ETFs recently purchased nearly 8,000 Bitcoin in a single day, the largest daily acquisition since July 2024. In the first quarter of 2024, spot ETFs were acquiring an average of 9,000 Bitcoin daily, which contributed significantly to Bitcoin’s price growth earlier in the year.