Market sentiment also hinges on a pro-crypto Trump victory or other macroeconomic factors like Fed rate cuts. Despite its recent volatility, BTC has shown resilience that was supported by institutional interest and potential liquidity from ETFs. However, the stablecoin supply has not yet translated into many major buy-side support for Bitcoin as many stablecoins are held off exchanges. Experts are also divided on the impact of Bitcoin ETFs. While some argue they signal mainstream acceptance, there are still skeptics who claim they aren’t attracting any new capital to Bitcoin. Bitcoin mining also has the crypto industry talking after a research report revealed that eco-friendly nations banning Bitcoin mining could unintentionally boost global carbon emissions.
Bitcoin Braces for Potential 10% Swing
Bitcoin's (BTC) price trajectory could shift by 10% in either direction depending on the outcome of the U.S. presidential election on Nov. 5. This prediction was made by the pseudonymous trader Daan Crypto Trades, who shared to his followers on X that while Bitcoin’s recent weekly close “didn’t look the cleanest,” its price direction could hinge on the election result.
Bitcoin recently experienced a surge in volatility after hitting its highest level in three months. At press time, BTC was trading hands at $69,184.86 after its price managed to climb by about 1.14% over the past 24 hours. Bitcoin was also in the green by 1.96% on its weekly time frame, according to CoinMarketCap.
Bitcoin 7d price chart (Source: CoinMarketCap)
Bitcoin's heightened volatility was evident since Oct. 29, when it briefly approached its all-time high of $74,649, only to pull back sharply due to election uncertainties. Analysts are now very closely watching critical support and resistance levels. IG Markets analyst Tony Sycamore pointed out in a Nov. 4 investment note that Bitcoin needs to break through the $74,000 level to confirm an upward trend that could potentially propel it towards $80,000. However, a sustained retreat below $65,000 could signify the recent rally's failure. This could return Bitcoin to a downward channel that persisted for seven months already.
While it is still uncertain exactly what the impact of the election will be on the price of BTC, there is still some broader optimism for Bitcoin and other risk assets. Many investors actually predict positive signals for Bitcoin and other risk assets regardless of the winner.
A victory for the crypto-friendly Trump is generally viewed as short-term bullish for digital assets, as he has openly pledged to support innovation in the U.S. crypto industry. Harris has not made crypto much of a focal point, and only briefly mentioned digital assets on Sept. 22 when she spoke about encouraging investments in AI and digital technology.
Beyond the election, Bitcoin investors are also factoring in the Federal Reserve’s monetary policy stance. The Fed has been cutting interest rates, including a recent 50-basis-point reduction on Sept. 18. This also raised expectations for more cuts. Monetary easing like this typically benefits crypto markets, as lower rates make safer investments less attractive to investors who are looking for higher returns.
Stablecoin Liquidity Lags
Ki Young Ju, the founder and CEO of CryptoQuant, pointed out that while the stablecoin supply has been growing, it has yet to translate into any major buy-side liquidity for Bitcoin. The current Bitcoin-to-Stablecoin Exchange Reserve Ratio shows that exchanges hold around six times as much Bitcoin as stablecoins. This imbalance means that there is limited liquidity for major buy orders, as only 21% of stablecoins are currently held on exchanges. This is a big drop from 2021, when over half of the stablecoin supply was reserved for trading.
Ju also explained that stablecoins today are very often used as a store of value rather than only for trading. This shift is especially noticeable in high-inflation regions. Chainalysis reported that stablecoins accounted for more than half of remittances to several Latin American countries, including Venezuela and Brazil, in recent years. The trend also extends to Turkey, where stablecoins play a major role relative to GDP.
Looking forward, Ju strongly believes that liquidity from digital asset exchange-traded funds (ETFs) and USD liquidity through platforms like Coinbase will be essential when it comes to supporting Bitcoin's price. WonderFi CEO Dean Skurka agrees with this view, and shared that strong ETF inflows point to sustained institutional interest in Bitcoin. Skurka believes that, alongside favorable macroeconomic conditions in the U.S. and Canada, this institutional momentum could act as a key catalyst for Bitcoin.
Bitcoin ETF Inflows Not Boosting Price
On the other hand, Jim Bianco from Bianco Research recently shared his skepticism about the impact of Bitcoin ETFs. He believes that the growing concentration of Bitcoin in traditional finance is more of a risk rather than a milestone for the cryptocurrency.
Bianco argued that Bitcoin’s price should have already surpassed $100,000, especially given the very favorable conditions like massive ETF inflows and a recent rate cut by the Federal Reserve. Despite these bullish factors, Bitcoin did not reach a new all-time high, even with record-breaking inflows from BlackRock’s IBIT.
Bianco compared the situation to gold, and pointed out that gold ETFs benefit from a steady influx of new capital, which has supported the metal’s price. In contrast, Bitcoin ETF inflows appear to come from funds already circulating within on-chain transactions or centralized exchanges, rather than new investors. According to Bianco, this limited source of new capital explains Bitcoin’s muted price response.
Bianco’s remarks faced a lot of criticism from Bitcoin advocates. Bitcoin maximalist Fred Krueger argued that Bianco’s claims lack any evidence, and pointed to Bitcoin’s 65% year-to-date gain, which outpaces gold’s performance. However, Bitcoin recently saw a slight dip to $67,000, despite ongoing debate over the long-term value of ETF involvement in driving its price upward.
Bitcoin Mining Bans Could Backfire
Bitcoin's price is not the only topic of conversation in the crypto space at the moment. Researchers now argue that eco-friendly nations banning Bitcoin mining could inadvertently harm the global economy by increasing carbon emissions.
A recent report from Exponential Science suggests that while bans may be well-intentioned, they actually very often lead to “carbon leakage,” where mining shifts to regions with higher carbon footprints. If countries with greener energy sources, like Canada, ban Bitcoin mining, the resulting activity in less sustainable regions could ultimately raise global emissions. The report also pointed out that a mining ban in Canada could boost Bitcoin network emissions by 5.6%, or approximately 2.5 million tonnes of CO2 per year, given the country’s significant use of nuclear and hydro-electric energy.
The Canadian province of Manitoba recently extended a moratorium on new electrical service requests for crypto miners. This pause restricts new mining operations and holds on any pending infrastructure agreements with government-owned Manitoba Hydro.
Meanwhile, Russia introduced new regulations for crypto mining. Although Russian President Vladimir Putin signed laws on Nov. 1 to provide a regulatory framework, experts clarify that these measures still impose certain controls on mining rather than fully legalizing it.
