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

Trump’s policy shift towards crypto is very recent, but it may impact the price of bitcoin in the near term depending on who wins the U.S. election in November

Investment bank Jefferies highlighted the recent shift in former U.S. President Donald Trump's stance on cryptocurrencies in a research report on Monday.

According to the report, Trump's overtures to the crypto industry, such as promising to install crypto-friendly regulators, could impact the price of bitcoin in the near term.

The report notes that Trump's presence at the Bitcoin Nashville conference and his statements on bitcoin could influence its price, especially considering his promise to maintain a strategic bitcoin reserve and never sell the government's seized bitcoin.

Jefferies also highlighted Trump's pledges to create a crypto industry presidential advisory council and to make the U.S. the "crypto capital of the planet." This positive shift in Trump's crypto policy is recent, but it could impact the price of bitcoin in the coming months, especially in relation to the outcome of the U.S. presidential election in November.

The report also includes updates on bitcoin mining, with observations on the halving and hashrate changes.

It highlights that bitcoin has gained around 5% since the halving in April, while the network hashrate dropped 8% in total over May and June.

As a result, the profitability of mining is better than anticipated earlier this year, with mining revenue per exahash down 40-45% compared to expectations of a 50% decrease.

Jefferies notes that larger bitcoin miners are still expanding their operations, with orders to significantly increase their installed hashrate. Hashrate serves as a proxy for competition in the industry and mining difficulty.

The report also discusses the ongoing consolidation in the bitcoin mining sector, highlighting CleanSpark's (CLSK) agreement to acquire GRIID (GRDI) and Riot Platforms' (RIOT) public offer for Bitfarm (BITF), which was later rejected.

According to the report, comments from mining firm executives suggest that more M&A activity is likely in the sector, with access to power being valued more highly than mining fleets.