The Democratic Influence on Traditional Assets
As the political winds shift, it’s natural to wonder how various assets respond to leadership changes. Historically, Democratic candidates like Joe Biden have been viewed as catalysts for gold’s value surge, primarily because of perceived monetary policies that may lead to more unbacked cash printing. This trend creates an interesting dynamic for both traditional assets like gold and modern players like Bitcoin.
Bitcoin’s Rally Since Election Day
Since the election results hit the news, Bitcoin has experienced a notable uptick, rising by 10%. Many investors are looking for clues as to where this bullish momentum will lead. With Joe Biden’s presidency on the horizon, are we witnessing a prelude to a cryptocurrency surge?
Long-term Bitcoin Holders Cashing In
According to the latest findings from Santiment, long-term Bitcoin holders are seeing profits nearing a 14-month high. This increase has sparked conversations about whether these investors will start to cash in on their investments. The Market Value to Realised Value (MVRV) ratio offers insights into this dynamic.
Understanding the MVRV Ratio
The MVRV ratio serves as an invaluable tool for understanding the profit margin among Bitcoin investors. By analyzing this metric, we can gauge if holders are in a position to sell for a profit. For context, just after Bitcoin surged past the $15,000 threshold, its 30-day MVRV ratio jumped by 18.8%, suggesting that new holders were enjoying nearly a 20% profit on their initial investments.
Whale Accumulation Patterns
Interestingly, the actions of Bitcoin whales—those holding large quantities of the asset—also play a significant role in market dynamics. Recent data indicates that these whales have been increasingly accumulating Bitcoin as the price surged beyond $15,000. Specifically, the total balance of addresses possessing between 10 to 100 BTC reached a 6-month low on September 20, only to bounce back and swell by 37,800 BTC.
Confidence in the Asset’s Future
This increased accumulation suggests that whales are regaining confidence in Bitcoin, potentially anticipating further price appreciation under a new Democratic administration. The intertwining of political cycles and crypto dynamics is a fascinating aspect of modern financial markets.
Closing Thoughts
The ongoing events surrounding Biden’s presidency and their reflection on Bitcoin and other assets is an intriguing narrative. As we move forward, it will be essential for investors to keep a close watch on these metrics and trends, considering the whims of political leadership alongside market behaviors.
