The Bitcoin has jumped over $76,000 after US president Donald Trump won the U.S. presidential election on Nov. 5, a Bitcoin analyst believed further gains. PlanB’s stock to flow and S2F model, which uses limited Bitcoin supply and halving events to determine hyperbolic price models, suggests Bitcoin could hit half a million dollars within the next four years.
Historically the S2F model has demonstrated strong price growth following each halving event likely reducing Bitcoin supply issuance. One of the key demand drivers was Trump’s proposal to setup a national Bitcoin reserve, which PlanB believes can add up to as much as “200,000 BTCs per year” in buying pressure.
Trump Administration’s Bitcoin Reserve Proposal and Market Concerns
Meanwhile, advocates like Senator Cynthia Lummis, are looking forward to the incoming administration to create a Bitcoin reserve analogous to U.S. gold reserve. Trump’s administration is likely to support institutional BTC adoption by issuing an executive order allocating federal funds to acquire BTC as a reserve asset, analysts believe.
Companies like MicroStrategy meanwhile are pushing BTC acquisition plans, leading microStrategy CEO Michael Saylor to pledge to buy 200,000 BTC per year over the next three years, which could further boost demand.
However, market manipulation practices are a concern. Yet on Nov. 8, prominent trader Skew was sounding the alarm on ‘spoofing,’ a tactic outlawed in conventional markets but still widespread in crypto.
Spoofing involves placing large, phony orders, which create the appearance of liquidity and pressure prices up or down, then removing those orders after a price reaction. And it’s worth noting that this sort of practice was observed in the recent trading highs, including a $77,270 BTC price on Bitstamp.
Even with increasingly inflows, BTC recent upward movement is lacking the ‘explosive’ price growth common in previous cycles, some traders said. This could be a sign of potential long squeeze, where leveraged traders are being squeezed out and the price of the asset goes down, analysts said.
The upcoming months could see the BTC next steps impact by regulatory shifts may be under the Trump administration and by institutional participation as both factors could influence demand as well as market dynamics.
