Bitcoin’s Future Could be Tied to the Outcome of the U.S. Election: Jefferies

The report states that Trump’s promises to the cryptocurrency sector may depend on the election result in the near term for the Bitcoin price.

Jefferies said that the profitability of Bitcoin mining after the halving was better than feared at the beginning of the year.

The bank said that larger Bitcoin miners are still in growth mode.

With a large number of both Republican and Democratic politicians, as well as former President Donald Trump, attending the Bitcoin Nashville conference last week, investment bank Jefferies noted in a research report published on Monday that there was a political subtext to the crypto event.

“Their attempts to install crypto-friendly regulators in the industry could lead to the BTC price being tied to the outcome of the US presidential election in the near term,” analysts Jonathan Petersen and Joe Dickstein wrote.

Trump promised in his Nashville speech that he would maintain a strategic Bitcoin reserve and never sell the government-seized Bitcoin {{BTC}}.

Jefferies notes that Trump has promised to choose crypto-friendly regulators, create a presidential advisory board for the crypto industry, and make the country the “crypto capital of the planet.”

The bank noted that this positive change in Trump’s policy towards cryptocurrencies occurred very recently, but could affect the price of Bitcoin in the near term, depending on who wins the November elections.

With Bitcoin gaining about 5% since the halving in April and the network’s hash rate falling by a combined 8% in May and June, “mining profitability has been slightly better than feared at the beginning of the year,” the authors wrote, noting that mining revenue per exahash fell by 40-45% instead of 50%.

Jefferies notes that larger bitcoin miners are still in growth mode and are taking orders to significantly expand their installed hashrate. Hashrate is an indicator of competition in the industry and mining difficulty.

The report stated that the Bitcoin mining consolidation phase has arrived, while CleanSpark (CLSK) recently reached an agreement to acquire GRIID (GRDI), while Riot Platforms (RIOT) submitted an offer to take Bitfarm (BITF) public, but this offer was later rejected.

The report said comments from mining companies’ management teams suggested there would be more mergers and acquisitions in the sector, with “access to energy being much more valuable than mining fleets”.

Read more: Trump’s Bitcoin Reserve Speech for the US Keeps Industry Waiting for More Details