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Bitcoin Mining Stock Analyst Talks About the ‘Trump Bump’
Analysts at HC Wainwright believe the market’s positive reaction to cryptocurrencies suggests increased confidence in Republican presidential candidate Donald Trump’s election prospects.
This confidence comes from the fact that Trump is known for his pro-crypto stance, particularly his support for Bitcoin (BTC) mining in the United States
Following a failed assassination attempt on Trump during a campaign rally in Butler, Pennsylvania on Saturday, July 13, Bitcoin and BTC mining stocks have seen a notable surge. BTC has risen more than 9% since the incident, reaching a high of around $63,790 on Monday, while mining stocks have gained around 10% in Monday’s session.
“Many believe the tragic event immediately boosted Trump’s chances of winning the November election, and given that Trump is widely seen as the pro-crypto candidate who has publicly expressed his support for Bitcoin mining in the U.S., markets have rallied after the failed attempt,” wrote Mike Colonnese, CFA.
Selling pressure
This price increase coincides with the end of the selling pressure from the German governmentwho liquidated his remaining 50,000 BTC seized by the Movie2k case. The BTC price glut has been alleviated, with US spot BTC ETFs seeing over $1 billion in net inflows last week, acquiring over 18,000 BTC.
In addition, there was a lot of selling pressure on the chain. partially due at the beginning of the long-awaited Mount Gox refunds. In 2010, Mt. Gox became the world’s largest Bitcoin exchange, but faced a significant setback in 2014 when it halted trading, filed for bankruptcy, and publicly reported the loss of approximately 850,000 BTC to theft. Recently, the movement of 47,228 BTC from a cold wallet associated with Mt. Gox triggered market reactions, as selling pressure from miners continues to impact prices following a recent halving that reduced mining rewards by 50%.
Hash rate increase
In the week ending July 7, BTC rose 8.7% to $61,015, outperforming broader stock indices. Network hash rate increased 2.7% to 598 EH/s, while network difficulty remained at 79.5T after a 5% adjustment on July 4.
Source: Documents filed with HC Wainwright.
Higher BTC prices offset lower transaction fees, pushing hash prices up 5.2% to $0.049/TH/day and regaining the $0.05/TH/day mark for the first time in three weeks.