Bitcoin surged to a record high on Wednesday as investors reacted to growing expectations that former President Donald Trump’s potential return to the White House could benefit the cryptocurrency market.
The price of Bitcoin spiked nearly 8%, reaching an all-time high of $75,345 in early trading, before slightly retreating to around $73,500. The surge marks a significant rally for the cryptocurrency, which had previously hovered around $73,000 in March. However, the uncertainty surrounding the US presidential race had led to some volatility in recent months.
Trump, who had been skeptical of cryptocurrencies during his presidency, has shifted his stance in recent years, now expressing a more favorable view of digital currencies. Leading up to the election, Trump promised to make the US “the crypto capital of the planet” and create a “strategic reserve” of Bitcoin. His campaign also accepted cryptocurrency donations and he appeared at a bitcoin conference in July to court crypto enthusiasts.
Russ Mould, investment director at AJ Bell, noted that Bitcoin had always been poised for a significant rally if Trump were to return to the White House.
“Bitcoin is the one asset that was always going to soar if Trump returned to the White House… After touching its new high, the market is now speculating about when, not if, it will smash through $100,000,” Mould said.
The price increase in Bitcoin came as traders bet on Trump’s growing momentum in the race, with predictions of his victory spurring optimism in the crypto market. As election results continued to roll in, some crypto investors looked forward to a favorable regulatory environment under Trump, following years of increasing scrutiny under the Biden administration.
During his campaign, Trump outlined a pro-crypto agenda, pledging to reduce regulatory hurdles and fostering a more favorable environment for digital currencies. This stance resonated with many in the crypto industry, which has faced stricter regulations and enforcement actions under the Biden administration. Trump’s victory is seen as a potential turning point for the industry, especially as crypto companies have faced mounting challenges in the US.
The rally also extended to other cryptocurrencies. Ethereum, the second-largest digital currency, gained around 7%, while Solana, the third-largest, rose approximately 15%. Dogecoin, the novelty cryptocurrency championed by tech billionaire Elon Musk, saw the biggest gain, jumping nearly 20%.
The election outcome was particularly positive for companies closely tied to Bitcoin, such as Coinbase and MicroStrategy, which saw their stock prices rise as the digital currency soared. Furthermore, cryptocurrency-focused betting sites, such as Polymarket, adjusted their predictions, showing a significant shift towards a Trump victory, with odds nearing 90% by Tuesday evening.
The cryptocurrency industry has also seen substantial political spending to support pro-crypto candidates. Industry-backed super PACs have raised tens of millions of dollars to support congressional races, with some key figures in the crypto space, including the Winklevoss twins, donating to Trump’s campaign.
Despite Bitcoin’s volatility, which saw a dramatic decline in 2022 following scandals like the collapse of the FTX exchange, the cryptocurrency has rebounded this year. This resurgence is partly attributed to the approval of a Bitcoin-linked exchange-traded fund (ETF), which has brought billions of dollars in investment.
With input from Fortune, the New York Times, and SFGate.
