Crypto Market Sees Second-Biggest Liquidation Day in October

Bitcoin and Ethereum traders suffered the biggest losses, with $58.3 million and $77 million, respectively. Despite recent optimism, Bitcoin fell to $65,500 before slightly rebounding, while Ethereum’s price dropped by more than 2% over the past day. However, institutional interest was able to remain strong as US-based Bitcoin ETFs saw a $198.5 million net inflow, led by BlackRock’s iShares Bitcoin Trust. Analysts now suggest Bitcoin could surge to $92,000 if Donald Trump wins the 2024 election. Some also believe it is possible for BTC to hit $200,000 by 2025 because of rising institutional involvement and mining sector changes.

Bitcoin and Ethereum Hit by Liquidations

The crypto market experienced some serious turbulence on Oct. 23 after long positions faced the second-largest liquidation day of the month. Crypto liquidations totaled $261 million, and over $203.5 million stemmed from long bets. This figure was still lower than the $450.8 million that was liquidated on Oct. 1 after Bitcoin dropped by close to 5%, according to data from CoinGlass. Ethereum (ETH) saw its largest single-day loss, with more than $77 million in long bets wiped out. Bitcoin (BTC) followed with $58.3 million in call options liquidated.

24 hour liquidation heatmap (Source: Goinglass)

This wave of liquidations came after some traders showed optimism for Bitcoin’s potential to continue rising, as the crypto was creeping closer to $70,000 on Oct. 21. This was the crypto king’s highest price in months, which certainly also boosted spirits.  

However, Bitcoin struggled to maintain its upward momentum, and dipped to a low of $65,500 on Oct. 23 before rebounding slightly to $67,386. At press time, BTC was trading hands at $67,222.45 after its price managed a slight 0.60% climb throughout the past 24 hours of trading, according to data from CoinMarketCap

ETH 7d price chart (Source: CoinMarketCap)

Meanwhile, ETH saw the largest decline among the top 10 cryptos by dropping more than 2% to $2,549 over the past day. The altcoin hit a two-month high of $2,750 on Oct. 21 before facing downward pressure. On-chain analysis suggests that Ethereum’s elevated transaction fees could be discouraging activity on its network. 

Despite the volatility, institutional interest in Bitcoin was able to stay resilient. The 11 US-based spot Bitcoin exchange-traded funds (ETFs) collectively saw a net inflow of $198.5 million on Oct. 23. The inflows were led by a $323.6 million influx into BlackRock’s iShares Bitcoin Trust ETF. However, this was offset by some large outflows, including $99 million from the ARK 21Shares Bitcoin ETF and $25.2 million from the Bitwise Bitcoin ETF.

Bitcoin ETF flow (Source: Farside Investors)

The US Bitcoin ETFs enjoyed a seven-day streak of net inflows from Oct. 11 to Oct. 21. Unfortunately, this streak was interrupted on Oct. 22, when the ETFs experienced a net outflow of $87.9 million.

Trump Win May Push Bitcoin to $92K

Despite the tough past couple of days, things might look up soon for the crypto market. Bitwise’s head of alpha strategies, Jeff Park, predicts that Bitcoin could surge to $92,000 if Donald Trump wins the US presidential election in November. 

In a recent post on X, Park explained that he used Bitcoin’s current price against Trump’s odds on the decentralized betting platform Polymarket, along with “merger arb-style probability math,” to predict a major rally after a Trump victory. His projection adds to a growing number of analysts who also believe that a Trump win could drive crypto markets higher.

Bitcoin millionaire Erik Finman agrees with this sentiment, and suggested that a Trump election win could see Bitcoin reaching as high as $100,000. He argued that Trump’s policies will ignite the crypto market, which could lead to widespread growth.

The crypto sector has never been so closely linked to a single political event. Trump openly  made pro-crypto policies a key part of his 2024 campaign, and he promised to transform the US into the “crypto capital of the world.” He even promised to fire Securities and Exchange Commission (SEC) Chair Gary Gensler on the first day of his presidency.

However, there are still some people who are a bit skeptical about the long-term benefits of a Trump victory for the crypto market. Billionaire investor Mark Cuban warned that while a Trump win could cause a short-term “pump” in crypto prices, the rally might not last very long at all. He specifically pointed to Trump’s proposed economic policies, like controversial import tariffs, as potentially inflationary measures that could slow down Bitcoin’s performance over the long term.

Trump vs Harris election odds (Source: Polymarket)

In national polls, Kamala Harris leads Trump by 1.8%, according to 538 poll data. However, crypto betting markets tell a very different story, with Trump holding an 18.8% lead over Harris on Polymarket.

Bitcoin Could Hit $200K by 2025

Bitcoin’s price could reach $200,000 by the end of 2025 as the crypto is set to enter a “new institutional era,” according to a report by Bernstein Research that was released on Oct. 22. The comprehensive 160-page report pointed out how Bitcoin miners will continue to consolidate the industry. VanEck’s head of digital asset research, Matthew Sigel, shared some details about the trend on  X. 

Currently, ten global asset managers hold close to $60 billion in Bitcoin wrapped in regulated ETFs. This is a huge increase from $12 billion in September of 2022. Bernstein projects that by the end of 2024, traditional financial firms will become the largest holders of Bitcoin. It will likely surpass the anonymous wallets that are associated with Bitcoin’s early development.

Bitcoin has made a massive impact in the ETF market this year so far. In fact, six of the top ten most successful ETF launches in 2024 were Bitcoin-related. Institutional analysts like Bernstein, JP Morgan, and hedge fund veteran Paul Tudor Jones are increasingly bullish on Bitcoin ahead of the US presidential election in November as well. In an Oct. 3 report, JPMorgan indicated that investors are leaning toward Bitcoin and gold as part of a “debasement trade,” driven by concerns over rising geopolitical tensions, persistent inflation risks, and high government deficits across major economies.

Paul Tudor Jones also recently shared his own positive outlook for Bitcoin and other commodities due to a likely rise in inflation after the US presidential election. On CNBC’s Squawk Box, Jones mentioned that his investment strategy includes holding a mix of gold, Bitcoin, commodities, and technology stocks, while avoiding fixed income assets. He strongly believes that these investments will benefit from the anticipated economic environment.

Bitcoin miners are also preparing to rebound from a post-halving slump. The halving event happened in April, and reduced mining rewards from 6.25 BTC to 3.125 BTC per block. Bernstein’s report suggests that industry players like Riot, ClearSpark, and Marathon are set to drive consolidation in the mining sector. 

Bitcoin mining power to be used for AI (Source: Matthew Sigel)

Additionally, the increasing demand for artificial intelligence (AI) computing power also creates a great opportunity for miners to diversify their revenue streams. Nick Hansen, CEO of mining firm Luxor, believes that miners could earn a lot more by providing energy for AI applications, compared to Bitcoin mining alone.