How could Trump’s Treasury Secretary selection influence Bitcoin?

11/19/2024 13:05:00 GMT|ByMatthew Hayward

BTC hovers around $91k, close to its ATH.
Treasury Secretary candidates & influence over crypto’s future.
Exploding US debt vs Bitcoin’s scarcity.
Institutional momentum.
The risks to the outlook.
Where next for BTC? Bitcoin forecast.

Bitcoin remained upbeat above $91,000 on Tuesday, with Trump’s cabinet appointments in focus and after MicroStrategy purchases being more tokens.

After reaching a record high of 93.4K last week on the prospect of crypto-friendly regulation under a second Donald Trump presidency, Bitcoin is consolidating around the 91k level. Markets are waiting to see who will take office with Trump and what policy changes they could bring.

News that Trump met with Coinbase CEO Brian Armstrong on Monday to discuss personnel appointments for his second administration is supporting BTC. The meeting came as Trump was selecting his cabinet and amid growing anticipation that the US could establish a strategic Bitcoin reserve when he takes office.

Treasury Secretary candidates

Attention is now squarely on Trump’s pick for Treasury Secretary, as the head of the Treasury will have a significant influence over crypto's future in the US. This is the department that not only prints U.S. dollars but also supervises national banks' Internal Revenue Service and financial crimes enforcement network.

Last week, Howard Lutnick, CEO of Cantor Fitzgerald, and Scott Bessent, founder of Key Square Capital Management, were leading candidates. Now, Mark Rowan, CEO of Apollo Global Management, and Kevin Warsh, former Fed governor, are also in the running.

Of these candidates, Lutnick is known as a crypto fan and is Elon Musk’s preferred choice. The other three have also spoken positively about crypto, although Kevin Warsh and Marc Rowan could be considered less pro-crpto. According to the polymarkets, Kevin Warsh has a 44% chance of being appointed treasury secretary, Scott Bessent 24%, Mark Rowan 16%, and Howard Lutnick 13.2%.

The more pro-crypto the choice, the more crypto-friendly Trump’s second administration could be and, therefore, the more beneficial it would be for Bitcoin.

Exploding US debt vs Bitcoin’s scarcity

While the Treasury pick is stalling the Bitcoin rally, for now, it could be argued that the outlook for crypto remains upbeat anyway; Trump’s economic policies of lowering taxes and massive stimulus injections could see America’s national debt explode, which would help Bitcoin (with a limited supply) outperform other assets.

Institutional momentum

The institutional shift towards Bitcoin is also gathering pace, as evidenced by BlackRock's size share Bitcoin trust, which recorded $40 billion in inflows in just 211 days. This surpasses other ETFs launched in the last decade.

Meanwhile, Michael Saylor's micro strategy continues to add to its Bitcoin holdings, buying $4.6 billion of Bitcoin and its largest perch, making good on plans announced last month to tap capital markets to accelerate its purchases of the cryptocurrency.

The risks to an upbeat outlook

As with any asset, there are always risks to an upbeat outlook. Bitcoin trades at an all-time high on optimism, partly owing to optimism over a friendly outlook. Should Trump's return to the White House fail to bring sufficient change to the crypto industry, BTC could fall. Furthermore, should Trump’s trade tariffs and economic policies spark a global recession, Bitcoin, which is a risk asset, could come under pressure.

Where next for Bitcoin?

On the 4-hour chart, BTC broke out of its rising channel to reach a record high of 93.4k. The price is consolidating around 91kn within a triangle pattern. The RSI has moved out of overbought territory but remains above 50. The price also holds above the 50 SMA, keeping buyers optimistic of further gains.

Buyers will look to rise above 92.5k, the falling trendline resistance to make an attempt on 93.5k and fresh record highs. Above here are blue skies so 95k and 100k are the next logical levels.

Support can be seen at 89.2k, the confluence of the 50 SMA, and the rising trendline support. Below here, 85k comes into play, last week’s low. A break below here creates a lower low and exposes the 100 SMA at 81.5k.

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