Bitcoin's MAGA Bubble Is Starting to Burst

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00:00What's wrong with crypto? Bitcoin is being absolutely hammered. Its price has fallen

00:05well below $100,000 or about 25% below where it was in October. And long-term hodlers are

00:11throwing in the towel and offloading tens of billions of dollars worth of the token.

00:15Part of the answer lies in US politics. What helped Bitcoin break through the $100,000 level

00:21last year was the election of Donald Trump, whose campaign promised to make America the

00:26crypto capital of the world, thanks to pro-crypto regulation and a Bitcoin strategic reserve.

00:32The reality today is that not all of these promises have been kept. And now there are

00:38setbacks for the Republican Party on the road to the midterms, with the most symbolic loss being to

00:43Zohran Mamdani in New York City. The risk is, therefore, that we have hit peak political

00:51support for the crypto industry and that the risks of a Democrat victory in the midterms

00:57are rising. And with that, the likelihood that the brakes will be pumped when it comes to giving

01:04the crypto industry what it wants from regulation. What's adding to this sense of panic among the

01:10crypto elites is that Mamdani's victory specifically speaks to the preoccupations with inflation and

01:18inequality, which are topics that the crypto industry has preferred to ignore or blame on

01:25actors such as the central bank. The problem is that crypto is today seen as an elite pursuit.

01:32One in seven Americans report owning crypto and the distribution of Bitcoin shows that fewer than 10%

01:37of Bitcoin addresses own 98% of all tokens. What this means is that it's basically political

01:44kryptonite in a K-shaped economy where people can see that their grocery bills are rising. Obviously,

01:52we shouldn't be too quick to write a political obituary of Bitcoin and the crypto industry has

01:57plenty of funds to influence the midterm elections. But right now, this sense of a political shift in

02:04the mood of American voters is surely contributing to the lack of buyer excitement for Bitcoin and the

02:11temptation to sell from long-time holders.