Biden’s Withdrawal from Presidential Race is Favorable for the Crypto Sector

U.S. President Joe Biden surprised some and confirmed predictions for many when he ended his candidacy for re-election on Sunday, July 22.

Some analysts suggest that the president’s withdrawal from the race could benefit bitcoin and the entire crypto sector in the coming months, while others warned that investors should temper their excitement for now.

The price of bitcoin immediately fell by as much as 2.8 percent after the announcement, to $65,800, but soon rose again by more than 3.6 percent above $68,000.

Describing Biden’s sudden move as a ‘victory for crypto assets’, eToro market analyst Josh Gilbert said that Trump’s increased chances for re-election represent ‘a significant boost for the crypto market’.

– It is hard to imagine that Kamala Harris or any other Democratic candidate could overturn Trump’s lead in the polls with only three months left in this election race, but a lot can happen in that timeframe, so nothing is off the table – he explained.

Trump has recently made bitcoin and cryptocurrencies a key part of his campaign, stating on June 14 that he would end Biden’s administration’s war on crypto if elected president.

10x Research founder Markus Thielen suggested that a crypto-friendly Trump could announce that he would make bitcoin a strategic reserve asset for the U.S. at the upcoming bitcoin conference in Nashville.

In a report dated July 21, Thielen wrote that the U.S. government holds only 212,800 bitcoins worth about $15 billion, and around $600 billion in gold reserves. If the government were to double its investments in bitcoin, it would be almost equal to the price effect of net inflows into spot bitcoin ETFs over a one-year period.

Looking ahead, Gilbert said he expects the price of bitcoin to rise, citing the upcoming launch of spot ethereum ETFs in the U.S. as one of the main catalysts for growth across the market.

However, some analysts say that the recent Biden development may not lead to an immediate increase in cryptocurrencies.

Swyftxa analyst Pav Hundal warned that while Biden’s withdrawal could increase Trump’s chances, it would be difficult to directly link it to the current price jump in the crypto market.

– This recent jump could be attributed to early speculation about ethereum ETFs, and it is important for investors to remain cautious and not get overly excited in the short term – Hundal said.

Similarly, Gary Black, managing partner at The Future Fund, warned his 433,000 followers on X that Trump’s presidential victory is far from a done deal.

– Those who think Trump/Vance will win convincingly have jumped the gun – Black wrote.

He added that the American public does not trust Trump after the events of January 6. He is not a fan of Biden or Kamala, but Democrats could still nominate Newsom, Michelle Obama, or some other leading Democrat as their presidential candidate.