Topic: The US Factor: Why Bitcoin's Price is Tied to American News and Politics (Read 432 times)

You could reason actually exactly the other way around.

Bitcoin's price expectations are related to the question: how likely is it in the future that people (or institutions) buy or sell Bitcoin?

The US could already be saturated with financial assets, even regarding cryptocurrency holdings. In the US, about 30-50 million people seem to hold crypto already, and also among institutional investors the BTC and crypto holdings are probably way superior to the world's or even the "industrialized countries"' average. While most other countries' inhabitants (with exceptions like El Salvador, UAE and Argentina) aren't still that active, and their potential adoption there is still far away from a ceiling.

Where you're right is that for me the US has a lot of potential to influence Bitcoin to the downside if it turns too anti-crypto. But the US news, from the ETF up to the Trump phenomenon, just in the last months were responsible more for bullish than for bearish movements. The bearish news, with the exception of today (where I'm not sure if the US stock market was responsible for the drop or the insecurity about the Middle East situation), were related to other factors, like MtGox, the movie2k.to coins, and the Iran-Israel tensions.

Okay, from the rest of the world the Bitcoin-related news were actually limited or neutral, for example India didn't change its crypto policy with the new coalition government, EU moved on with MiCa as expected. There was one exception though: the Hong Kong ETF approvals, which hint to a friendlier Chinese policy in the future, but almost didn't impact the market.

It still seems disproportionate to me that even minor US political or market movements seems to inmediately move the Bitcoin price, even if a correlation to Bitcoin's attractiveness for investors in many cases can be disputed. Today's US job report could for example also be interpreted as bullish for Bitcoin because of the rising probability of a Fed interest rate cut

In conclusion: For me, from a "fundamental analysis" point of view, US news have more potential to move Bitcoin to the downside as the US are already way above average regarding its crypto holdings and industry, while news from the rest of the world, led by India and China, but also the EU for example, have more potential to move it the upside. You're free to disagree of course

If we had experience bullrun before now, a lot of people would castigate what they are supporting right now, they will never allow any political movement to attract Bitcoin, even if they do, it wouldn't be that powerful like it is right now but head to the service board, they now promote political candidates and not paid but freely, delusional time I must say for Bitcoin.

A lot of them just want to influence the price, say all they want to get their money and then sell their bags and once they are done, we will come back to where we started again, that's what they want I think otherwise why would US now be something all of sudden everyone want to support. What happen decentralization that were been discussed for many years even before I knew about Bitcoin.

Have you tried this approach? 
https://en.wikipedia.org/wiki/List_of_countries_by_financial_assets_per_capita


Now when you're only 4 times more populous but your average citizen holds just 6% and less than 1% of the financial assets then it means, well, you don't matter that much no matter how many plastic forks you ship via Temu!

I seriously don't understand why some are still in this denial, it's the biggest economy in the world, the financial center of this world, insane amount of money, the only military capable of power projection, a country that attracts millions and billionaires, and that actually leads in every aspect of Bitcoin ecosystem.
The US economy sneezed in 2008 and people who didn't know where actually Washinton was on a map lost their homes 8 000 km away.

Imagine if the US would turn totally anti-crypto, China way  We're f***!
Would you care if Senegal bans it? I mean I don't even know if they haven't done it already, nor does the world care!

Exactly. America is still the leading force of the global economy. Even when some countries are beginning to move away from the USD. Major tech companies and big financial markets all are based in the US. It's quite normal to see BTC (and other cryptocurrencies) react to current events in the country.

The day when the US stops being a superpower, will be the day when the crypto market shifts its attention away from it. I can imagine BTC turning into "bullish mode" if Donald Trump becomes President again. We can't predict the future, so lets hope for the best.

America dominates the global financial system. Here, events resonate globally. Just a fact. When news breaks in the U.S., wise Bitcoin holders pay attention. Like the NASDAQ tick, everyone feels it. Bitcoin is the future of money, and America will profit. The U.S. goes beyond Wall Street suits and big tech. They have the geniuses, inventors, and visionaries constructing crypto's next great thing. Thats the essential value.

Others have miners and consumers, but America innovates and sets trends. People worldwide seek leadership. Even with louder players like Hong Kong, it wont change soon. Remember Bitcoin's global reach. No country controls it. But America can be leading the way.

First of all, they want control, because that is the main obsession of all governments in the world (regardless of the political structure and level of democracy). China achieved this by completely banning mining and trading, and the US wants (according to Trump) to control everything that has to do with cryptocurrencies. The way it looks at this moment, everything seems like preparation for privatization or absolute control over the crypto sector with the help of private companies.

Of course, in this process, the goal is to make as much profit as possible, and gradually to distance ordinary people as much as possible from the idea of ​​using cryptocurrencies as currency. Bitcoin has never been a problem in terms of trading, but it was and will remain a problem whenever it comes to using it as a currency.

There are several factors that can explain the influence of American news on BTC price. First, the US is the most powerful political actor in the world. Its dominance is challenged by other powerful players, but the US still has more influence than others. Second, the US economy is the biggest economy in the world, so anything related to finances and economic policies that is going on in the US is closely watched around the world. Finally, English is lingua franca of the Internet and pretty much of the world. The US news are always in English, so they reach broad audiences.
But despite all that, I wouldn't say that the impact on the price is huge. It's just significant because there's a lot of media coverage of Trump's shift to becoming pro-crypto.

Effects can be on same direction or opposite direction and like sometimes people believe that Bitcoin is 'tied' in correlation with US. stock market, S&P 500 and so on but they later will see that correlation between these markets are not too strong or not significant enough to consider as one can affect another.

Even if the USA falls to a second position, under China, effects from strategic changes in the country will continue to have big impacts. Like how China, at the second position sometimes is a source of news, fud and cause market fall, crash and so on.

Well, the US is still the world's leading superpower. Right? While some countries are moving away from the USD, its position as the world's reserve currency remains untouched. It makes sense for the crypto market to move according to the USD's performance (or whatever happens in America itself). Things will change once US hegemony goes down for good. It's likely BTC's market price will be tied to the performance of the world's next reserve currency. It could be China's CNY, Japan's JPY, or even the EU's EUR. Who cares? As long as Bitcoin fills our pockets with money, nothing else matters.

Bitcoin price got affected by the decision of China to ban Bitcoin mining, Bitcoin price got affected by Elon Musk saying that it's not going to accept Bitcoin payments at Tesla because of environmental and energy issues and etc... Bitcoin's price got affected by SEC leaking their decision on Twitter. It gets easily affected and speculated, that's true and when a country like US makes a decision about Bitcoin, it's going to significantly affect the price. Bitcoin's price will basically be affected by every major economic powerhouse country, like the USA, China, Japan, Germany.
The USA is the number one economy in the world, its currency is the most traded currency in the world, English is the most spoken language in the world and Americans speak and write English, so news spreads easily and rapidly. There are endless reasons to explain why Bitcoin's price is tied to American news and politics.

Yeah! You would think that a currency made to detach itself from the regular financial industry would be less fragile.  But nope, Bitcoin still seems chained to the traditional economy's volatility (or instability, rather) and  it feels like Bitcoin remains in its infancy, extremely dependent on America's economic health.  Before it can genuinely stand on its own and showcase its autonomy we are jammed on this thrill ride.

It took them a long time to embrace the potential, but in the last year or two, they have done a lot in adapting and integrating crypto into their economy. For example, the SEC suddenly became interested in regulating many services, even though they had been operating for years before that.
Looking at everything, I am more of the opinion that the US government has recognized the financial potential (rather than an interest in innovation) and wants its share.

FTFY.

So to be serious: I also don't agree with everything uncle Gary and the SEC did, but their enforcement against centralized services and coins pretending to be decentralized is ok for me (simple investor protection logic), and it should also not affect Bitcoin's price at all. But I don't think that's the reason for "the US factor", as I think it's much older. Grandpa remembers a pump in 2013 which was fueled by a speech by Al Gore for example.

The obsession of the crypto sector with the US seems to have deepened in recent years, but I think this was already in Trump's presidency when it started. And of course when big parts of the mining industry moved to the US in 2021 it continued to deepen.

For example in recent years also the interest rate in the US (which has nothing to do with the SEC) impacts a lot in the Bitcoin price, much more than the Euro area's, even if the eurozone is almost as important, and I have never heard China and India's Central Banks' decisions to have any impact on Bitcoin price. I think this has more to do with the perception of Wall Street as "the center of money" and the dollar as the "world currency".

I'm not sure if I understand fully ... do you mean here that the US is more prone to adopt innovative financial products and thus get dominant in the sector? That may be true, especially for the fintech sector (which is somewhat connected to the crypto sector).

In reality however, the first big crypto companies were located in other countries, e.g. Mt. Gox as a French/Japanese company. The US adoption came later but seems to have been stronger.

That must be an interesting thread that I would love to join the discussion but since I don’t understand or can write in Spanish, I will use a google translator to read through people’s opinion and view about that. Thanks.


The fate of one thing tied to the whole economy and politics of one country is not a nice idea and I wish other countries will become power house in bitcoin use and adoption just like the US with their big influence in it.With many countries having an equal influence or shared influence on bitcoin, the volatile nature of it might reduce when big news on economy and politics comes out from one faction of it that has great influence in it. Your points are clear and with Honk Kong of BTC and Ethereum ETF could bring a change in this and China coming in to lift their ban, it has been their for too long than expected.

Remove Bitcoin and discussed other econoical things, you will see that US is one the countries that influence things. Imagine Bitcoin becomes a legal tender in the US, other countries such as China and Russia that are among the biggest economy will like to review their stand on Bitcoin and if that eventually accept by these big countries, others will followed because they all serve this countries especially the some African leqders that see Bitcoin like piece of shit.

Trump need crypto vote to win this election coming by November and he knows that nothing goes for nothing. He need to protect the miners and give them a purpose that US is a friendly place to mine because right now, this government is not help matters for miners, many of them are no longer mining because the government has forbid them from doing it but Trump is promising them a safe place to mine their Bitcoin. What I don't know is whether this will come with regulations or not because the government can't be trusted you know.

Bitcoin market price is not majorly affected by the American news and politics, instead, its only being affected by the way of how people go about with FUD, the market is majorly affected by the numbers of investors who are buying and those who are dumping, this is by what we called market demand and supply, but some will think that the economic and political activities on what is happening in US is strongly affecting the market price, which is one of the causes why some will invest and because of fear missed out and record losses on what they have invested on bitcoin because of related things like this.

After all, the United States is still the dominant country in the world and more importantly, they hold the world's money printing machine. Meanwhile, bitcoin or any other financial market to operate or increase in price, it requires money, more money, so it is not surprising that everything depends largely on and is heavily affected by them, not just bitcoin.
I don't like the dominance of the United States but I don't deny this, they are still a dominant country and have a great influence on the world in all fields. Bitcoin will not be immune to that either.

The influence of the US economic and political space has existed even before the tenure of Gary Gensler. It is common to see Bitcoiners monitoring the outcome of Federal Reserve meetings because it is certain that decisions on interest rates will affect the price of Bitcoin. But I don't think Bitcoin became a major campaign topic after Trump and other Republicans began to show interest in the sector.

The only country that would have reduced the influence of the US in the Bitcoin ecosystem is China. Disappointingly, they took the wrong step. Now, common elections have become a major event in the Bitcoin system. But we are hoping that countries like Hong Kong will grow its crypto market while other countries with dependable electric power supplies like Iran can lead the Bitcoin mining sector.

1. Media
2. Superpower
3. The Qibla/center is not only in terms of politics, but also includes the world economy in general.

Not only about the impact on Bitcoin, but we have seen that US policy can affect every policy in every country. Therefore, there are many factors that will change regarding this presidential election. Whoever is elected, all eyes will be on him, bitcoin in this case is a piece of various other pieces, the price of gold, property, stocks, prices of goods, services, and large companies that have been established in the US will change.

That is just based on my personal view, whether it is true or not, what is clear is that I am not a US citizen but at least without realizing it, I always want to know the political situation there.

When we take into account that Bitcoin is the first truly decentralized cryptocurrency that was created precisely to have an alternative to the existing financial systems, and now all these bitcoiners (most) look to the US and some barking bully as their messiah who will lead them along the way through which honey and milk flow

You should be careful what you wish for, because it could come true - and anyone who thinks it's good for one country or one person to have so much influence on Bitcoin is seriously mistaken. The sad truth is that most people just want the highest possible price and they don't care at all about the consequences that can come from all of that.

Being affected by something doesn't mean it is "tied" to it.

US dollar being a major global fiat and having major businesses including centralized exchanges in US and also having many American bitcoin investors makes it so that any US news affect the bitcoin market. But that's pretty much the same with any major player in the scene like China. For example over the past decade each time Chinese government has made a major move regarding bitcoin, the price has been significantly affected. But that doesn't mean bitcoin price is tied to Chinese news and politics.

Add here that the US becomes interested in something when a large monetary value appears. Anything that can bring them money, they will gladly accept, and a large economy easily absorbs new things.
The influence they have on the further course and development is more obvious for discussion because they prefer to adapt things to themselves rather than being flexible themselves.

You do realise that USA is a major player in the crypto currency community, don't you op? They are a major player in literally anything important happening across the world which is why they are the supreme powerhouse that they are today.

Many institutional investors who invested money recently into the BTC ecosystem came from their country too.

That might be because the vast majority of crypto trading is done in the United States, by large companies, if not by people who try to make a financial killing.

Also, policies that the USA makes about crypto seem to have a worldwide effect. For example, when the FBI recommended Americans to not use no-KYC exchanges, Phoenix, Wasabi, etc. all blocked their services to US people.

From the bottom in bear market, price will recover to its previous ATH and in a new market cycle, in the past it always makes new ATH. 500% from bottom is not an unbelievable recovery and growth of Bitcoin from bear market price. It happens many times in past cycles, not only recent years under Biden Presidency term.

If the President is not Biden, but Trump or anyone else, Bitcoin will not care about it and simply complete its own market cycle, price cycle from bull-bear-bull-bear market. A Presidency term and administration is Anti- or Pro-Bitcoin is one of elements but don't decide or is able to break Bitcoin market cycle.

Bitcoin market cycle

Well, Bitcoin went up 500% under president Biden, so it makes no sense to call Biden or his presidency "anti-Bitcoin".

But you are saying that Bitcoin is tied to... US politics. Just like the US dollar is.  So much for Bitcoin being an "independent" currency and all that and is outside of the reach of any government.

But holders of US Dollars don't hang on every nuance of the US elections to see if their investment is going to go up or down. But to hear Bitcoin holders tell it, US politics is the only thing keeping their investment afloat. The supposedly "government-proof" Bitcoin needs the right political faction in Washington to be in place to survive.

I guess this is where rhetoric meets reality? Bitcoin starts life under libertarian ideals of a government-free world, and ends up holding its hand out for government alms like Ayn Rand's looters from Atlas Shrugged. Crazy stuff .

This US factor only began because of uncle Gary's unfair crackdowns and regulation through enforcement tactics against the cryptospace. On Trump, he declared that he his procrypto. I reckon presently the leader in the polls and surveys will very much make the price of bitcoin bullish or bearish because if Trump is leading, we might have procrypto policies in America which will certainly make the cryptospace pump. However, if it is a candidate from the Democrats that is leading, we might have more uncle Gary and crackdowns which is very bearish.

To be fair, not just Bitcoin, but every financial market could be tied to American news and Politics, like the Fed's CPI or the currently hotly contested US Presidential and Vice Presidential race. Why? Most likely as one powerful nation, and then their USD as the world's reserved, the world's strongest economy.

Perhaps if Bitcoin will really mature, perhaps we can see it decoupling from US economy, and we might be independent with it. We have stable coins tied to dollar, what if we get a stable coins that is new, like tied to Japanese Yen? Could it shift everything? My point is that we need varied currencies to lessen dependency on US.

I mean when you have the two options that are or were up until recently available you have a party that is pro crypto and one that is anti crypto. You also have the US financial markets launching Bitcoin Exchange Traded Funds and so there is also that factor which obviously greatly opens up new institutional investors to flood into the market. I mean those two right there are two good examples, but that doesn't mean that the US is the only one who has an effect on BTC. Look at El Salvador & countries that embrace crypto.

It's because medias and people always like to correlate one thing with another thing.

We can't deny there are many traders out there, they usually rely their decision on global news, so whenever x news from x medias launched, they will make x decision.

But, for long term holders, these news are useless. Bitcoin price will keep moving whathever the news and politics comes up, after all the longest holder will win.

Bitcoin is decentralized, anyone can move create and send coins, miners can move to wherever they want, there's no rules miners must mine in US.

Even the entire world economy is under the influence and domination of the US, and bitcoin is also a part of the world economy , so it is not surprising that it cannot avoid the impact of the US . The US market is considered the center of the entire world from finance, technology, military, economics...so you should not be surprised to see them having a significant impact on most fields and industries  . 

Some say bitcoin is decentralized and not controlled by anyone, that's not wrong but don't forget that bitcoin is being used by people and people are also part of the world economy and we cannot avoid the impact of the world economy. So don't expect bitcoin to be immune to the outside world.

Bitcoin is heavily intertwined in our financial systems, see the ETFs, different companies and governments holding their share of Bitcoin. Fiat has a direct correlation with Bitcoin because of how fiat moves and how the economic outlook is supposed to be. Think of how S&P or NASDAQ moves when Jerome Powell speaks. A poor market outlook results in a general downward trend for the majority of the market save for inflation hedge like precious metals.

It'll be naive to think that there is any currency out there which is free from the influence of news and politics anywhere in the world, much less from one of the biggest and most prosperous countries. Cryptos like Bitcoin will always be affected by politics, same as literally anything that has any value in the world. Think of this: If one of the biggest countries in the world shows signs that they'll be easing policies on Bitcoin, then obviously the optimism on Bitcoin would be high -> higher prices.

You also highlighted an important phrase: Speculation. Crypto in general can still be treated like a speculative currency, where traders are eager to predict the general trend of Bitcoin, if it'll rise or fall. This would obviously lead to the market being more volatile than usual.

Bitcoin is just one among many that's heavily affected by US hegemony. In one way or another, the US leads the world. Even back in my small town, my father's old radio which broadcasts local stations relays to us what's happening in the US.

I guess all eyes are in the US, perhaps because everything's there. As regards Bitcoin, the mining is there. The ATMs are there. All kinds of platforms offering services all over the world are there. The most influential ETFs in the world are based there. The richest Bitcoin owners are from there. The list goes on.

But I guess this is also partly because we're fixated on the US all the time. We don't have to. But it has already gone to a ridiculous extent that even the most inconsequential event happening in the US like Snoop Dogg shitting on his pants could be associated with the next direction the Bitcoin price would take.

A common criticism of the US Dollar and other sovereign currencies is that they can be manipulated by politics: governments can inflate their value by issuing new currency, and politics is what controls that. Hence political winds can alter your investment in that currency, which makes it a poor investment.

Bitcoin has the same problem, but ten times worse...

That's correct, but from the US even minor news about presidential candidates (!), i.e. not even government actions, impact in price.

The China mining ban was intimately related to Bitcoin's core ecosystem. And mining was very concentrated in China until 2021. Regarding the Ukraine war, it mostly seems to have impacted due to its influence on inflation in almost all major markets, and that impacting on interest rates globally -- including in the US. Interest rate changes in major countries are not so much "news" stories, but fundamental reasons why people invest more or less in Bitcoin, because of the increased competition of traditional financial products (like bonds) when the rates are high.

To be fair, the US is one of the few countries where presidential candidates even used Bitcoin in their campaign. The only other country I know where this was a major topic is El Salvador. Even in Argentina for example, when last year a "Libertarian" (Javier Milei) won the presidential election, Bitcoin wasn't a significant campaign topic, although some minor politicians from Milei's party have publicly supported cryptocurrencies.

I am guessing it would be because of USA’s general role in the economy of the world. The dollar is the reserve currency of the world and the fall or rise of the dollar can have massive impact on bitcoin.

It’s also because of sheer market size.

It’s difficult to say accurately just how many americans are investors of bitcoin but we can assume that there’s enough that any political or economic situation happening in USA can affect the investors and therefore affect the market.
Well that’s because Biden’s opposition is Trump who has been constantly mentioning bitcoin. Biden stepping down just increases the chances of Trump winning and by extension his ideas about bitcoin.

Among all the other keynotes I will simply say this is my strongest point, I think no matter how we try to make an argument for this, American been the leading economy means that’s it’s adoption of a new technology most especially when it has to do with the economy will have a major impact on the news than most countries, this doesn’t mean other country’s economy news or bitcoin related laws doesn’t have impact on it too. Remember when China banned mining or when the energy supply decreased due to the Russian/Ukraine war, they had their own impact too


I don’t think, bitcoin isn’t manipulated rather investors are manipulated into making decisions which we all know will affect bitcoin, bitcoin price is dependent on the demand and supply of it, it is the investors that react to economic news which isn’t new. People feed on the words of the US election and make their decision. If a news broke out today and everyone doesn’t reacts that wouldn’t affect the market, so it is the supply and demand of investors that manipulate the bitcoin price

We started a whole thread about this in the Spanish forum. But we didn't come to a really convincing conclusion yet.

Regarding crypto users, the US seems to be only third in the world - of course there are only rough estimates, but it seems India and even China (despite the heavy restrictions) have more crypto users than the US, of course due to their larger population (see Triple-A estimates).

Main factors may be:

1) the US as the leading economy in general, and the presence of US news in the world's media headlines,
2) the US as the place where most modern "tech companies" reside -- in reality, most modern software companies, because industrial tech is mostly located in Asia
3) several founders of big cryptocurrency businesses (Binance, for example) and also altcoins are from the US or located in the US,
4) the Wall Street as the world's "money hotspot" and synonym of Capitalism in general, which is important above all for financial products like ETFs, but also crypto stocks,
5) of course, in recent years also the large mining sector (35-45% of the world's hashpower, according to estimates)

I think while these points of course are important, the importance for the crypto market in my opinion is disproportional. Much more bullish than a crypto-friendly legislation in the US, where already 15% of all people have owned crypto-assets, would be a crypto-friendly legislation in India for example, or a lifting of the restrictions in China. I'm thus quite bullish regarding the developments in Hong Kong (the authorization of Bitcoin and Ethereum ETFs there), because they can hint to a change in the Communist Party's views about Bitcoin and cryptos, and possible further removal of crypto restrictions in China.

You make a good point: Bitcoin's price is deeply tied to US politics.

Maybe this why crypto spending in the US election has surpassed every other industry including Big Oil and healthcare.

It's worth noting that this year is the last time anybody can credibly say that Bitcoin can't be manipulated by governments like (say) sovereign currencies can. In fact, Bitcoin can (and is) manipulated by governments--especially the US--more than any currency in history. The price of Bitcoin now hangs on the words of every US politician--far more than the value of the US dollar does, for instance...

Why is bitcoin price heavily affected by everything from the United States, when there’s a major news in America you’ll see speculators talking about how bitcoin price could go up or down as a result of that news. I saw that USA has the highest number of bitcoin miners, is anything related to why most of this news is affecting the price of bitcoin and is this how it will continue forever. Even when Biden decided to step down from the presidential race, many speculates that bitcoin could go up as a result of that.