TL;DR
- The recent recovery in the crypto market is largely attributed to the impact of political events, including the assassination attempt on former President Donald Trump.
- Bitcoin and Ethereum have been the main beneficiaries of the rebound, with increased open interest in futures and a notable recovery in derivatives trading.
- Political influence, especially the possibility of Trump’s reelection and his pro-crypto stance, along with recent central bank decisions, has boosted confidence in the crypto market.
The recent recovery in the crypto market has caught the attention of analysts, largely due to political events, including the assassination attempt on former President Donald Trump. According to the latest Bybit report, one of the world’s largest crypto exchanges, this series of events has been pivotal in driving a trend referred to as the “Trump Trade.”
The Bybit report, developed in collaboration with BlockScholes, explores how speculation around Trump’s potential reelection has influenced the crypto market. Since the assassination attempt on July 13, 2024, cryptocurrency markets have shown a clear recovery. The resurgence has been evident in both spot and derivatives markets, with a significant increase in open interest and trading volumes.
Bitcoin and Ethereum have been the primary beneficiaries of the rebound. The report highlights that open interest in Bitcoin futures has returned to levels seen before the early July sell-off, indicating a solid recovery. Meanwhile, Ethereum has seen a notable increase in futures trading, with a flattening of the term structure as anticipation builds for the launch of the Ethereum Spot ETF.
Trump Could Boost Crypto Market Surge at Bitcoin Conference
In the options market, implied volatility for Ethereum has exceeded realized volatility, reflecting greater uncertainty and expectations regarding the future of the Spot ETF. The demand for out-of-the-money options has increased, indicating a bullish sentiment and a desire for upside exposure.
The political environment has also played a crucial role. Joe Biden’s withdrawal from the presidential race and the rising prospects of Trump’s reelection, combined with his pro-crypto stance, have elevated market confidence.
Trump’s upcoming speech at the BTC conference in Nashville is expected to further bolster his image as a pro-crypto candidate. Additionally, there are rumors that Trump might designate Bitcoin as a strategic asset for the Federal Reserve, which could significantly impact the global adoption of the cryptocurrency.
Lastly, recent central bank decisions have also influenced the market. The European Central Bank’s decision to keep interest rates at 3.75% and the Federal Reserve’s expected steady rate of 5-5.25% have contributed to the overall stability of the crypto market.
