Bitcoin is gearing up for a potential rally in the closing months of this year, with several developments in the pipeline, analysts say.
While Iran's missile attack on Israel fell 4 percent on Tuesday, bitcoin fell from a two-week low of $60,300 after rising above $61,500.
The reduction came after Iran fired more than 180 ballistic missiles into Israel in response to Israel's attack on Hezbollah positions in Lebanon. The attack was the first use of Iran's hypersonic Fatah missiles, state media reported.
Major U.S. market indexes for traditional stocks fell, with the Nasdaq Composite down 1.53%, the S&P 500 down 0.93%, and the Dow Jones Industrial Average down 0.41%.
But as investors try to gauge the economic impact of rising tensions in the Middle East, four major tailwinds stand out, according to K33 Research analysts Vettel Lunde and David Zimmerman.
These include aggressive Chinese stimulus measures, fluctuating US macroeconomic data, the upcoming presidential election and increased liquidity from FTX's bankruptcy filings, the pair wrote in a recent investor note on Tuesday.
China has stepped up global liquidity.
China's recent aggressive stimulus measures are expected to have a continued positive impact on global liquidity, the analysts said. Last month, the People's Bank of China introduced a series of rate cuts and rolled out a $142 billion stimulus package.
China's rate cuts and fiscal stimulus are aimed at staving off recession and stimulating growth, encouraging a more favorable environment for speculative risk assets like Bitcoin.
Employment figures
The release of US employment data scheduled for next Friday is expected to play a role in shaping short-term market sentiment.
Bitcoin's correlation with US stocks has reached multi-year highs, with employment figures likely to influence interest rate expectations and in turn market behavior.
A favorable job outlook could provide further upside for Bitcoin as investors assess the macroeconomic landscape.
American election
The third reason is the United States presidential election.
Scheduled for November 5, market analysts expect Trump's victory to serve as a positive catalyst for Bitcoin, considering the more favorable position for the crypto industry in recent years.
Conversely, a Kamala Harris win could result in a short-term negative market reaction due to the administration's anticipated deregulation of digital assets.
“Markets do not like uncertainty, and for new industries like crypto, the uncertainty of the November elections will be very difficult,” said Hashdex Chief Investment Officer Samir Kerbege. Decrypt.
However, regardless of who wins, crypto will enter a “more favorable policy environment,” Kerbage added. That's good news for industry participants who have long called for clearer regulatory rules in the US.
Lenders of FTX
Finally, expected payouts from the FTX bankruptcy are expected to contribute to Bitcoin's growth, with lenders projected to inject roughly $2.5 billion into the crypto market by the end of Q4 or early Q1, Lunde and Zimmerman said.
On Tuesday, the bankrupt crypto exchange FTX received 94% support from the creditors of the offshore platform FTX.com, CoinDesk said. reported.
The plan seeks to repay 118% of claims in cash to most creditors, which is about $6.83 billion in claims. With the lender's approval, the plan will move to bankruptcy court for approval, with a hearing set for Oct. 7.
The $6.83 billion payment is part of a wider distribution. In May, FTX's bankruptcy filing announced that creditors and customers are expected to receive between $14.5 billion and $16.3 billion in total compensation, covering all claims against FTX's former platforms.
Either way, the depletion of those assets is expected to lead to significant repurchasing of the crypto, giving a boost in liquidity to Bitcoin and other digital assets, the analysts said.
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