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Yesterday, spot Bitcoin 
$105,688 ETFs saw a record net inflow of $1.38 billion. This development, combined with Donald Trump’s victory in the U.S. elections and the anticipated 25 basis point rate cut by the Federal Reserve, resulted in Bitcoin’s price rising to $77,000 this morning. However, according to QCP Capital, some traders have started to withdraw from positions known as the “Trump effect.” This situation has led to the U.S. dollar giving back much of its post-election gains and treasury yield returns returning to recent ranges after fluctuating.
Trump’s Trade Policies Impact Bitcoin
Trump’s planned 60% tariff against China has created unease in the markets, prompting investors to highlight the increasing public debt in the U.S. This suggests that Bitcoin may carry a lower risk premium compared to other risky assets. Consequently, the largest cryptocurrency is expected to outperform other riskier assets.
According to QCP Capital, expectations for Bitcoin to remain strong are bolstered by the uncertainties created by Trump’s trade policies and the financial challenges faced by the U.S. economy.
Positive Cycle in Bitcoin and Increased ETF Inflows
QCP Capital analysts suggest that the current strong upward trend in Bitcoin could create a feedback loop among investors. Increasing interest in spot ETFs may drive up the price of the largest cryptocurrency, which, in turn, could encourage more individual investors and systematic fund purchases.
Analysts expect that as volatility decreases, confidence in Bitcoin will increase. Furthermore, the strong performance of the largest cryptocurrency at current price levels may motivate investors to make additional purchases, creating a significant “upward pull” environment in the market.
