Bitcoin bounced back early Tuesday morning, fueling hopes that the symbolic $100,000 mark is within reach.

Over the past 24 hours, Bitcoin’s price has risen 6.8% to $87,600, while Ethereum has risen 3.3%. Many altcoins followed suit. Avalanche is up 8.4%, Dogecoin is up 35.1%, Shiba Inu is up 2.5%, BNB is up 1.1%, and XRP is up 9.9%.

While Trump’s election victory may be the biggest driver for now, it is far from the only factor fueling Bitcoin’s rise.

Behind the scenes, broader trends – ranging from a post-halving supply crunch to favorable macroeconomic developments – are helping to push crypto prices higher.

Crypto insiders believe these factors, and not Trump’s victory, are the real long-term drivers behind Bitcoin’s rise.

Trump’s victory is a short-term catalyst, but not a game changer

Trump’s return to the White House certainly made major headlines this past week. The reason? Trump is less seen as a bad cop for the crypto community than the Biden administration.

There’s a good reason for that.

In preparation for this year’s elections, Trump became the first presidential candidate to accept crypto contributions. At one point, he even hinted at the possibility of building a federal Bitcoin reserve.

“For too long, our government has violated the cardinal rule that every Bitcoiner knows by heart: never sell your Bitcoin,” he said.

In a counterbalance to Biden’s more aggressive regulatory stance, crypto lobbyists have also rallied behind Trump.

Notably, Cameron and Tyler Winklevoss, co-founders of the Gemini crypto exchange, contributed $1.6 million to Bitcoin, while Kraken co-founder Jesse Powell donated $845,000 to Ether.

In August, BitMEX co-founder Arthur Hayes predicted that a Trump victory could push Bitcoin’s price above $100,000.

“October and November are historically strong months for Bitcoin, especially in the year of the halving and the year after,” he said, suggesting that a Trump presidency could lead to a “rush of new buyers” who buy Bitcoin “more than $100,000.”

Still, Hayes and others believe the election outcome could only impact Bitcoin’s price in the short term.

According to them, it is bitcoin’s fundamentals and macroeconomic factors – especially its appeal as a hedge in an inflation-prone, highly indebted economy – that will determine its long-term trajectory.

Broader factors behind bitcoin’s rally

Some analysts argue that this rally is driven more by pent-up demand resulting from Bitcoin’s April halving, a pre-programmed cut in Bitcoin mining rewards.

“Yes, the incoming Bitcoin-friendly administration has provided a recent catalyst, but that’s not the main story here,” Jesse Myers, co-founder of Onramp Bitcoin, wrote on X yesterday.

“A post-halving bubble is the result,” he added, referring to the pattern in which every Bitcoin halving has historically led to a rally.

Another important factor is Bitcoin’s potential role as a hedge against currency depreciation. Hayes echoes many economists who believe that neither political party has the will to balance the budget.

In August, Hayes said: “Like any politician, Harris, regardless of party affiliation or economic persuasion, will instruct Yellen to use the monetary tools at her disposal to avert a financial crisis.”

That underlines his belief that inflation-driven spending can become a reality regardless of the election outcome.

Still, Bitcoin must first prove itself as an inflation hedge, as it has behaved more like a risk asset so far – rising and falling in tandem with investors’ risk appetite.

Wall Street is deepening its crypto ties

Another force driving Bitcoin’s valuation is growing interest from Wall Street.

In recent months, financial giants like Goldman Sachs and Morgan Stanley have expanded their Bitcoin-related holdings, indicating that institutional players are seeing cryptocurrency as more than a speculative asset.

According to Matt Hougan, CIO of Bitwise Asset Management, institutional involvement adds both credibility and stability to Bitcoin’s long-term prospects, making it less susceptible to the extreme volatility we’ve seen in previous cycles.

“Institutions are seeing Bitcoin’s transformative potential for certain financial processes, making it not just an alternative asset, but a potential part of future portfolios,” Hougan recently noted.

With both political and economic factors favoring Bitcoin, the coming weeks could be crucial in determining whether the cryptocurrency continues its steady climb.