A recent shift in housing policy led by former President Donald Trump has stirred conversations about potential improvements in liquidity within U.S. markets, with some analysts suggesting this could provide indirect support for assets like Bitcoin.
The proposal includes a substantial initiative to acquire up to $200 billion in mortgage-backed securities, aimed at revitalizing a housing market that has faced significant stagnation due to rising interest rates. Analyst Lark Davis has highlighted how this measure is intended to alleviate pressures on the housing sector.
Davis noted that the expected outcomes of lower mortgage rates and enhanced credit availability could reactivate housing transactions and refinancing activities, ultimately facilitating broader capital flows throughout the economy.
In addition to the bond purchases, the housing initiative also encompasses an executive action designed to limit large investment firms from acquiring single-family homes. Trump emphasized that residential properties should be owned by individuals rather than corporations, a sentiment believed to target institutional buyers, specifically firms like Blackstone.
This dual approach of bond acquisitions alongside restrictions on corporate home buying may gradually unlock a housing sector that has stagnated for several years.
According to Davis, the combination of these housing measures, the anticipated drop in interest rates, and the limitations on corporate purchases suggests a potential “unfreezing” of the U.S. housing market. A recovery in this sector could lead to increased economic activity, which historically correlates with a favorable environment for risk assets, including Bitcoin.
Currently, Bitcoin is experiencing relatively stable trading conditions, moving within a narrow price range as the market digests new macroeconomic updates. Davis mentioned that the cryptocurrency is holding near its 20-day exponential moving average, a critical short-term indicator for market momentum. He observed, “The upside potential here is bouncing off this 20-day EMA retest… So, a potential 30% price move to the upside back to the 200-day if we bounce successfully off the 20-day EMA.”
Adding to the uncertainty, the analyst is monitoring the upcoming U.S. Supreme Court decision regarding Trump-era tariffs, which could introduce short-term volatility into the market. Concurrently, the prospect of further interest rate cuts and a change in Federal Reserve leadership later this year remain significant points of focus.
