Trump’s Bitcoin Support Causes Split from Global Stocks

Donald Trump’s push for Bitcoin is causing a noticeable split from global stocks. The 30-day correlation between Bitcoin and the MSCI index for global equities is dropping to -0.20, according to Bloomberg. This is rare since the measure has mostly been positive since 2020. A correlation of 1 means Bitcoin and global stocks move together, while -1 means they move in opposite directions.

Correction occurred due to Mt.Gox issue, reaching the defense line of 1-3 month holders

“As a result, the price temporarily fell and is currently hovering around $66.7k. This price range is very close to the average purchase price of $66.5k for 1-3 month $BTC holders.

If that… pic.twitter.com/MVfvxzerSn — CryptoQuant.com (@cryptoquant_com) July 23, 2024

During his recent presidential campaign, Trump has strongly supported Bitcoin and the wider crypto market. His endorsement is a key factor in Bitcoin's divergence from global stocks. The correlation measure is now nearing -0.20, a rare occurrence. Typically, this measure has been positive, showing Bitcoin and global stocks moving together.

Trump has vowed to support the Bitcoin mining industry if re-elected. He will also speak at the Bitcoin Conference 2024, underscoring his commitment to cryptocurrency. This support is influencing Bitcoin's market behavior, setting it apart from traditional stock movements.

Global stocks are under pressure amid a mixed second-quarter earnings season. Investors are looking for signs that this year's rally, driven by AI and tech firms, can continue. Trump's strong backing of Bitcoin is creating a separate path for the cryptocurrency, making it behave differently from global stocks.

Betting markets favor Trump as the Republican nominee for the upcoming election, boosting Bitcoin in hopes of a more crypto-friendly regulatory environment. Sean McNulty, trading director at Arbelos Markets, said, “Bitcoin is now a proxy for a Trump victory. For stocks, there are no clear winners and losers from a Trump trade.”

In response to Trump's crypto influence, Vice President Kamala Harris is trying to engage with the industry. She may attend the Bitcoin Conference, though her office hasn’t confirmed this. This move shows her effort to connect with the crypto community and possibly influence market sentiments.

However, CryptoQuant CEO Ki Young Ju reported no significant rise in trading volume or Bitcoin outflows on Kraken. Monitoring the Asian trading session will be crucial, but current signs are positive for Bitcoin's price action.

Trump's Bitcoin advocacy is significantly altering how the cryptocurrency correlates with global stocks. His strong support is causing a noticeable split from traditional stock movements. The correlation between Bitcoin and global stocks is nearing -0.20, a rare occurrence since 2020.

As Trump champions Bitcoin, market dynamics are changing, with Bitcoin becoming a proxy for his potential victory. Global stocks face challenges, with investors watching the earnings season and the AI-driven rally.

Harris's potential engagement with the crypto community and Bitcoin's price movements amid the Mt. Gox distribution add more complexity to the market. Overall, Trump's Bitcoin support is reshaping financial markets, creating a distinct path for cryptocurrencies amid traditional global stocks.