Potential Trump victory and rising global liquidy may benefit crypto, analyst says

Macroeconomist Lyin Alden argues that a potential victory for Donald Trump in the upcoming US presidential elections could lead to the extension of corporate tax cuts, which in turn could favor the crypto markets. 

These tax cuts, which were approved during Trump’s first presidential term, are due to expire soon but are likely to be prolonged if Trump is elected again. 

“The market might be saying that a Trump victory increases the odds of those tax cuts remaining in effect or becoming permanent,” Alden pointed out in the latest interview with Cointelegraph.

That means, “all else being equal, potentially larger deficits [...] can be stimulatory for parts of the market,” she explained.

However, according to Alden, the most important macro-economic factor affecting crypto markets remains  global liquidity, which has been gradually recovering in recent months. 

Referencing projections by the New York Fed, Alden expects a resumption in the Federal Reserve's balance sheet growth by 2025, or “at least no longer shrinking of the balance sheet.” That could drive the price of Bitcoin ( BTC ) significantly higher. 

“I do think that we are probably breaking out now, and if not, then I would expect a breakout either later this year or through 2025", she concluded. 

To find out more about Lyn Alden’s macroeconomic analysis, don’t miss the  latest interview on our YouTube channel and don't forget to subscribe!