Table of Contents
After Donald Trump’s election victory, the Bitcoin price reached new highs beyond the $95,000 mark, and the $100,000 mark is within sight. For professional investors, a fundamental reassessment of the crypto market is emerging that goes beyond the previous ETF-driven capital inflows.
“There are two decisive factors at the moment,” analyzes James Butterfill, head of research at Coinshares. On the one hand, an inverse correlation with interest rate policy is manifested: the easing of monetary conditions since the first Fed rate cut in September 2024 led to inflows of $13.65 billion. Aggregated capital flows for 2024 already mark a record volume of $35 billion.
What is remarkable is the changing correlation structure of Bitcoin to traditional asset classes. “The correlation to the S&P 500 is currently 49 percent, well below the high of 72 percent in 2022,” explains Butterfill. However, we are observing an increased positive correlation with the US dollar, which can be attributed to the expectation of a more regulatory-free environment.
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After Donald Trump’s election victory, the Bitcoin price reached new highs beyond the $95,000 mark, and the $100,000 mark is within sight. For professional investors, a fundamental reassessment of the crypto market is emerging that goes beyond the previous ETF-driven capital inflows.
“There are two decisive factors at the moment,” analyzes James Butterfill, head of research at Coinshares. On the one hand, an inverse correlation with interest rate policy is manifested: the easing of monetary conditions since the first Fed rate cut in September 2024 led to inflows of $13.65 billion. Aggregated capital flows for 2024 already mark a record volume of $35 billion.
What is remarkable is the changing correlation structure of Bitcoin to traditional asset classes. “The correlation to the S&P 500 is currently 49 percent, well below the high of 72 percent in 2022,” explains Butterfill. However, he is observing an increased positive correlation with the US dollar, which can be attributed to the expectation of a more regulatory-free environment.
Regulatory paradigm shift in sight
The second driver, dubbed the “US election dividend” by Butterfill, could hold even greater potential. With the Republican majority in both chambers of Congress and the announced resignation of crypto-critical SEC Chairman Gary Gensler on January 20, 2025, a fundamental regulatory change is imminent.
The “Strategic Reserve” initiative led by Senator Cynthia Lummis deserves special attention. The project envisages the creation of a state Bitcoin reserve of up to one million units. “According to Polymarket, this scenario has not yet been fully priced in, with an implementation probability of currently only 28 percent,” emphasizes Butterfill.
A realization would be “a huge boost to Bitcoin’s credibility as the largest government in the world would buy it.” This would not only reduce the institutional stigma around Bitcoin, but also open the floodgates to widespread institutional acceptance.
Institutional Implications for the Altcoin Sector
But it’s not just Bitcoin that is currently benefiting from Donald Trump’s election victory. Other cryptocurrencies have also experienced an impressive rally in recent weeks. After Bitcoin benefited from the approval of crypto ETFs in the USA at the beginning of the year, well before the Trump rally, a similar picture could emerge for altcoins. A crypto ETF that would also include altcoins is currently being reviewed by the SEC. As a reminder: At that time, the price of the world’s most important cryptocurrency jumped from around 42,000 euros to around 60,000 euros.
Solana, now number 4 in the crypto universe with a market capitalization of 93.8 billion euros, is emerging as the primary candidate. “Solana is the most realistic option for future ETF structures due to its broad retail acceptance,” explains Max Shannon from the Coinshares analyst team. An ETF would make it easier for investors to access and could further strengthen the price of the currency.
* What are the potential benefits and risks for institutional investors considering Bitcoin as a new asset class in light of the “Trump Bump”?
## World Today News – Exclusive Interview: The Trump Bump and the Future of Cryptocurrency
**Introduction:**
Welcome to World Today News, where we delve into the most pressing issues facing the global economy. Today, we’re tackling the electrifying surge in Bitcoin and the potential revolution in the cryptocurrency landscape sparked by Donald Trump’s recent election victory.
Joining us today are two esteemed experts:
* **James Butterfill**: Head of research at Coinshares, with a deep understanding of crypto market trends and institutional investment.
* **Max Shannon**: Analyst at Coinshares, specializing in the altcoin sector and emerging trends within the broader cryptocurrency ecosystem. Gentlemen, thank you for joining us.
**Section 1: The Trump Effect and the Rise of Bitcoin**
* **Moderator**: James, you’ve highlighted two key drivers behind Bitcoin’s recent surge. Could you elaborate on the “US election dividend” and why Trump’s victory hases such a profound impact on the crypto market?
* **Moderator**: The article mentions a potential “Strategic Reserve” initiative by Senator Cynthia Lummis. What could this mean for Bitcoin’s legitimacy and acceptance among institutional investors?
* **Moderator**: Max, how has the perception of Bitcoin changed within institutional circles following this surge, and are traditional investors now taking cryptocurrency seriously?
**Section 2: Beyond Bitcoin: The Altcoin Outlook**
* **Moderator**: Max, Solana is being touted as a potential frontrunner for inclusion in future crypto ETFs. Why is Solana considered particularly well-positioned in this regard, and how might this impact the altcoin market?
* **Moderator**: What other altcoins show promise in this new regulatory landscape, and which sectors within the crypto ecosystem might experience the most significant growth in the coming months?
* **Moderator**: James, what are the potential risks associated with this rapid expansion of the cryptocurrency market?
**Section 3: Looking Ahead – The Future of Crypto Regulation**
* **Moderator**: Both of you have highlighted the potential for significant regulatory shifts in the United States. What are your predictions for the future of crypto regulation under a potentially more favorable administration?
* **Moderator**: Could this renewed regulatory interest in the US lead to a wider global embrace of cryptocurrencies?
* **Moderator**: gentlemen, what advice would you give to individuals who are considering investing in cryptocurrencies for the first time?
**Closing:**
Thank you, James and Max, for your insightful perspectives on this rapidly evolving landscape. This is certainly an exciting time for the cryptocurrency market, and we look forward to seeing how these developments unfold in the months to come.
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