Originally published on: December 02, 2024
As the anticipation builds around Donald Trump’s upcoming presidential inauguration on Jan. 20, 2025, researchers suggest that the cryptocurrency market might hit a local top. Historical data indicates that in US election years, stocks and cryptocurrencies like Bitcoin tend to perform well initially post-election, only to cool off once the new administration takes charge.
Research from Bloomberg, Macrobond Financial, and TS Lombard suggests that post-inauguration, especially when a Republican takes office, there is typically a slowdown in market momentum. This trend is particularly noteworthy given the Republican party’s reputation for being business-friendly, leading to a surge in post-election market enthusiasm.
What does this mean for investors? According to Citi’s US equity strategist Scott Chronert, a tactical approach may be necessary to navigate the potential market shifts post-inauguration. The data suggests a rebound in market performance after an initial correction following the inauguration.
While the S&P 500 index saw a significant increase to 6,047 by Dec. 2, signaling a 4.5% gain since November, the cryptocurrency market also experienced notable growth after Trump’s election victory. Bitcoin and Solana were among the top performers, with some analysts predicting further rallies despite potential corrections along the way.
According to Bitget Research’s Ryan Lee, Bitcoin’s price could experience a 30% correction before resuming its bullish trajectory. This correction could bring Bitcoin’s value down to $70,000 per coin, offering a potential buying opportunity for investors.
Looking ahead, investors are bullish on the crypto market’s prospects for 2025, with expectations of a peak in the second half of the year. As Bitcoin’s correlation with US equities weakens, the market remains exposed to broader economic trends, making it essential for traders to stay informed and nimble in their investment decisions.
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