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Good morning everyone,

Bitcoin is on the move.

The price of bitcoin approached US$68,400 on Wednesday, reaching its highest level since July and sparking a rally across the crypto sector. Bitcoin is up more than 9% over the past week, and the rally has lifted the altcoin market and the share prices of crypto-related stocks.

As far as I can tell, there are four main reasons for bitcoin's uptrend. Let's look at them.

DISCLAIMER: This newsletter is not financial advice. It does not take into account your financial situation, is general in nature, and is for educational purposes only.

Also, this newsletter contains affiliate links. This means that I may receive a commission from them. But for Crypto Down Under, I only choose products I use myself and can recommend wholeheartedly. Don’t forget to do your own research.

1. Q4 is historically bullish

The last quarter of the year is known for strong bitcoin performance. Historically, bitcoin has returned an average of 23.3% in Q4, showing a strong seasonal trend toward bullish performance. That's why bitcoiners refer to the last three months of the year as "Uptober", "Moonvember" and "Bullcember". Bitcoin Magazine recently predicted "parabolic growth" for Q4.

2. Kamala Harris is starting to show (some) love for bitcoin and crypto

On the 5th of November, America will elect a new president.

Donald Trump has fully embraced bitcoin and crypto. He has spoken at a prominent bitcoin conference, promised to fire Securities and Exchange Commission (SEC) chairman Gary Gensler (who is loathed by many in the industry), and pledged to get the US government to hoard bitcoin. He bought burgers with bitcoin in a New York City pub last month and even launched his own decentralized finance project, World Liberty Financial.

If Donald Trump is elected, bitcoin and crypto will rally strongly.

On the other hand, Kamala Harris is part of a presidential administration that has been openly hostile to the sector. She has been far less vocal about her own views on digital assets than Trump, leading to fears that she would continue her administration's hostile stance.

But slowly, Harris is dropping hints that she won't continue Joe Biden's stance on bitcoin and crypto. Harris' economic policy ideas revolve around what she calls the "opportunity economy". This week, her campaign released the "Opportunity Agenda".

In the agenda, Harris promises to support "a regulatory framework for cryptocurrency and other digital assets". While the agenda doesn't elaborate on what this means, people are starting to understand that Harris will take a different approach to Biden.

The bottom line is that regardless of the outcome, the election will be good for bitcoin and crypto as it will lead to more regulatory clarity.

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3. Liquidity is coming to the markets

Global liquidity is on the rise.

The US Federal Reserve began cutting interest rates in September, kicking off an easing cycle. Similarly, China's central bank has announced a massive stimulus package to pull its ailing economy and property market out of the doldrums. The world's two largest economies have opened the money pump.

As investor Lyn Alden points out, the price of bitcoin has been more correlated to various measures of global liquidity over the past decade than any other asset class. And given where we are in the credit cycle, it's highly likely that liquidity will increase over the next 12 to 18 months.

4. Conflict in the Middle East hasn't turned into all-out war (yet)

The conflict in the Middle East continues, and I will spare you the details. It's ugly and a tragic waste of human potential. But it hasn't escalated into an all-out war. Fears that Israel would attack Iran's oil industry or its nuclear facilities haven't materialized.

I don't expect the conflict in the Middle East to end any time soon. Markets would be nervous if the price of oil were to spike because of an all-out war. So when it comes to conflict in the Middle East, no news is good news.

Have a great weekend, everyone!

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