With bitcoin at more than 85,000 dollars per unit while it was worth 40,000 in January, the cryptocurrency sector does not hide its happiness in this month of November. How far can this price increase go? Is the election of Trump the only justification for this outbreak? Louis-Alexandre de Froissard, wealth management advisor and founding president of Montaigne Capital, helps us decipher the prices:
This rise in prices is the end of a long crypto winter…
We feel a certain relief, yes. We took a hit in 2022 when we were assured that classes were going to go to the cellar. We instead acquired cryptos at that time and advised our clients to do the same.
So you weren't surprised by this change of heart?
No, it's more of a confirmation of what we've seen in recent months. During the fall in prices and despite a market that bled enormously, the industry continued to build. Interest has shifted from the public to institutional, with the arrival of ETFs (a financial tool that allows you to benefit from developments in bitcoin without directly investing your money in the digital currency). This increase is the translation of this movement.
It's not just the consequences of Trump's election?
There always needs to be a spark. In fact, you never know what the spark will be that will start the market. Bitcoin is correlated with cash, bank deposits and short-term credit. From the moment we feel that there is going to be a relaxation of interest rates, we know that there will be this type 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 eased up on regulation and Trump went about it panzeroutright promising to deregulate. If we have less regulatory pressure on the sector, we 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?
He had taken a slap. It was $4,000 not too long ago. All alt-coins (crypto excluding bitcoin) have taken a beating. So it's somewhat normal that they regain strength. It is a form of recovery.
We see that meme coins, crypto based on Internet memes, such as dogecoin or pepe are also in the green. It’s not the institutions that are pushing them?
No. It’s part of the gamification of finance. You have people who are on the lookout for these trends. It is a way of playing with values with all the risks that this entails.
What to expect next?
When I make short-term projections, I am sure to be wrong. In the medium term, however, I am very optimistic. What matters to me is to position myself for the coming cycle where Bitcoin will be a means of international exchange. We are going to have States and pension funds which will adopt it as a store of value, it will completely change the situation.
