With bitcoin at over 85,000 each 40,000 in January, the cryptocurrency sector is not hiding its happiness this November. How far can this rise in prices ? L’Trump’s election the only reason for this surge? Louis-Alexandre de Froissard, wealth management consultant and founding president of Montaigne Conseil et Patrimoine, helps us decipher the prices:
This price rise marks the end of a long crypto winter…
There’s a sense of relief, yes. We took some knocks in 2022 when we were assured that prices would go into the cellar. Instead, we acquired cryptos at that time and advised our customers to do the same.
So you weren’t surprised by this turnaround?
No, it’s more a confirmation of what we’ve seen over the last few months. During the slump in prices, and despite a market that has bled enormously, the industry has continued to build. Interest shifted from the public to institutional investors, with the arrival of ETFs (a financial tool that enables investors to profit from bitcoin’s evolution without investing their money directly in the digital currency). This rise is the result of this movement.
It’s not just the consequences of Trump’s election?
You always need a spark. In fact, you never know what the spark is that will get the market going. Bitcoin is correlated with cash, bank deposits and short-term credit. The moment you feel that interest rates are going to ease, you know there’s going to be this kind of movement. But of course the election had an impact. During the campaign, a study [de mai 2024] on Swing States showed that many voters there had crypto. Biden has taken his foot off the gas on regulation, and Trump has gone his way. panzerpromising outright deregulation. If you put less regulatory pressure on the sector, you boost it. This type of reasoning is clearly that of the institutions, not that of the public.
And why are other cryptocurrencies, like ether, also benefiting from the movement?
It had taken a beating. It was at $4,000 not so long ago. All alt-coins (non-bitcoin cryptos) have taken a beating, by the way. So it’s only natural that they’re recovering. It’s a form of recovery.
We see that meme coins, crypto based on meme internet, like dogecoin or pepe are also in the green. Aren’t they being pushed by institutional investors?
No. It’s part of the gamification of finance. You have people who are on the lookout for these trends. It’s a way of playing with values, with all the risks that entails.
What can we expect next?
When I make short-term projections, I’m sure I’ll be wrong. In the medium term, on the other hand, I’m very optimistic. What’s important to me is to position myself for the coming cycle in which Bitcoin will become an international medium of exchange. We’re going to see governments and pension funds adopting it as a store of value, and that’s going to change the game completely.