In the ever-changing and growing world of cryptocurrency and blockchain development, staying informed about global events is crucial. As the cryptocurrency space ages, Bitcoin grows in correlation with traditional markets and responds in a similar way to macroeconomic events, including US elections, war conflict, geopolitical tensions and so forth. This underscores the importance of monitoring events like inflation, major elections, and global crises such as wars or pandemics.

Attending AusCryptoCon, this November in Sydney, offers a unique opportunity for attendees to stay ahead of the latest cryptocurrency trends and developments. At AusCryptoCon, you’ll gain the latest insights from global industry experts, helping you navigate the complexities of the crypto market and make informed decisions in this dynamic landscape.

As we near a US election, and talks of crypto regulation and price action stays in the headlines, we turned to Stormrake’s Head of Sales & Brokerage, Bisher Khudeira to provide some insights into what to watch for in the weeks and months ahead.

How does Inflation Impact Cryptocurrency? (CPI and FOMC events)

Inflation has played a crucial role in price action of BTC over the last few years. CPI (consumer price index) data is the main driver behind inflation rate decisions, when these numbers are released monthly, BTC and other risk on assets often become volatile. FOMC meetings often follow to determine what to do with interest rates. When these events deliver data or announce that fall outside of market expectations, true volatility occurs. When inflation increases or an interest rate hike occurs, risk on assets and markets often suffer. Vice versa, when inflation is down or an interest rate cut occurs then BTC and other risk on assets often rally.

The most recent set of inflation data and the FOMC statement regarding interest rates are a great example of the volatility surrounding these two events and its impact on Bitcoin (June 12). The chart below shows Bitcoin’s price action at the time of these events.

BTC rallied over 3% on the back of bullish inflation data (CPI was lower than forecasted) in less than three hours. The market was flying, with some altcoins being up over 16% and many others returning double digits. Before the market had time to digest the bullish CPI numbers, a mere six hours later, Jerome Powell issued his hawkish statement. This speech would result in Bitcoin falling ~3.73% and altcoins suffering a much greater retracement. The majority of cryptocurrencies had fallen to lower prices than they were at before the bullish CPI numbers were released. 

This was the last time we saw BTC over $70k and may have been the first domino to fall in the recent pullback.

As mentioned earlier, interest rate cuts often lead to bullish price action for Bitcoin and other risk on assets. 2025 is expected to have a number of rate cuts. A year of aggressive rate cuts will likely result in bullish price action from Bitcoin and other risk on assets. Could we be in for the frenzied bull market that every market participant is eagerly waiting for? Only time will tell, but if rate cuts go to plan, probability should suggest a  good chance of BTC finally reaching six figures and the bull market to be in full swing. 

How do World Events affect Cryptocurrency?

For those who have kept up to date with global conflicts and events, it is no secret that war or pandemics often lead to major sell offs of risk on assets. Over the last 12 months, we have seen many risks on assets create all time highs. This has not been an easy road however, with the ongoing conflict in the Middle East, markets have had many pullbacks due to news coming out of the conflict. There were multiple occasions where BTC retraced 5-10% and other assets similarly whilst the USD rallied as a result of new news from that conflict. Global conflict has proven to be a bearish catalyst, with BTC falling 10% and the S&P 500 falling 5% on the back of Russia’s invasion of Ukraine. 

Not to mention the global pandemic Covid, which saw BTC fall 65% and the S&P 500 fall 35%. These global events have a major impact on all forms of finance, whether it is traditional or cryptocurrency.

The chart above displays the impact that the aforementioned global events had on BTC (prevalent candles) and the S&P 500 (feint bars).

US Elections and Crypto

Election years often prove to be bullish for Bitcoin, bear in mind that Bitcoin has only experienced three presidential elections. This upcoming election is unique to Bitcoin as this is the first time both President elects have announced their support of Bitcoin and crypto. Couple this with the bullishness of election years in the past and we may be in store for a bullish end to 2024.

Bitcoin’s performance during election years:

The above table reflects the returns for each year BTC has experienced an election year. BTC has only increased 34% YTD. Whilst this is still positive and upholds the trend of a bullish year, it hasn’t returned anything comparable to previous years. This is no cause for concern, as the second half of election years have been when the majority of BTCs positive returns have occurred.

Bitcoin and Ethereum Spot ETFs:

The allure of a Bitcoin ETF was the main catalyst behind the BTC rally in late 2023. The first half of the year was great for crypto ETFs, as we saw the approval of the first Bitcoin Spot ETF in early January, followed by an Ethereum Spot ETF later in may. Bitcoin’s Spot ETF approval and trading went off without a hitch, with trading starting a few days after approval, which ultimately saw BTC reach new all time highs within a few months. The Ethereum Spot ETF on the other hand has not progressed as smoothly. Whilst Ethereum experienced a 20% to $3900 on the back of the likelihood of the ETF being approved, it plateaued and retraced since due to delays of the launch date. Recently the filing for a Solana Spot ETF has occurred, causing Solana to rally 10% on the news. 

One caveat to the BTC ETF trading, was the mass selling by GBTC (Grayscale BTC ETF). These BTC had been locked up for years and were pending official BTC Spot ETF approval, so those who were not able to access their coins. GBTC had net outflows for almost two months after the Spot ETF trading began (as seen as the graph below). Since then, there have been constant net inflows.

ETFs have been nothing but bullish for the cryptocurrency space, as it has allowed new demand to enter the crypto space. We can expect more ETFs to be approved and begin trading in the near future.

Catch the latest cryptocurrency insights and news live at AusCryptoCon this year! Tickets to Australia’s largest, premier cryptocurrency event are on sale now. 

Now in its third year, AusCryptoCon is the largest gathering of crypto and Web3 enthusiasts, builders and technological leaders. With a number of incredible activations, hundreds of world renowned speakers and thousands of cryptocurrency businesses all under one roof, the ICC Sydney is poised to host the most exciting crypto event of the year. 

Don’t miss out!