Since the recent election we have all been an audience to Bitcoin’s remarkable rally, driven by optimism surrounding the election of Donald Trump as U.S. president. Bitcoin surged close to $90,000 on Tuesday, buoyed by expectations that Trump’s administration will be supportive of the cryptocurrency sector (Westbrook & Robertson, Reuters). The world’s largest cryptocurrency reached a peak of $89,982, marking a 30% gain since November 5, before settling at $86,730.
Crypto Market Euphoria
The positive sentiment in the market has also pushed other stocks higher, such as Elon Musk’s automaker Tesla, which gained almost 40% following the election. Crypto enthusiasts believe that Trump’s policies will favor digital assets, as evidenced by his campaign promise to make the United States the “crypto capital of the planet” (Westbrook & Robertson, Reuters). This optimism has led to speculative buying in crypto-related stocks and mining companies.
Experts Weigh In
Alvin Tan, head of Asia FX strategy at RBC Capital Markets, noted that the positive sentiment towards Bitcoin reflects a belief among crypto enthusiasts that the new president is a like-minded supporter of digital assets. However, Tan added that Bitcoin’s volatility remains a risk due to its lack of a traditional valuation anchor (Westbrook & Robertson, Reuters).
Matthew Dibb, chief investment officer at Astronaut Capital, suggested that Trump’s support for Bitcoin may even prompt other nations to purchase Bitcoin, potentially sparking a global trend. Dibb also emphasized that the potential for U.S. listed Bitcoin miners to become nationalized could be a major catalyst for these stocks (Westbrook & Robertson, Reuters).
Market Reaction
The surge in Bitcoin prices had a ripple effect on other cryptocurrency stocks. Crypto miner Riot Platforms jumped nearly 17%, while fellow miners MARA Holdings and CleanSpark leaped almost 30%. MicroStrategy, a company known for its heavy investments in Bitcoin, announced it had purchased around $2 billion worth of Bitcoin between October 31 and November 10, leading to a 26% surge in its stock price (Westbrook & Robertson, Reuters).
Nick Twidale, chief market analyst at ATFX Global, stated that the rally reflects investor optimism regarding Trump’s support for the industry, which is expected to boost demand for both cryptocurrencies and related stocks. Twidale emphasized that Bitcoin’s rally was further fueled by its near-record high levels before the election result (Westbrook & Robertson, Reuters).
Broader Crypto Market Trends
The euphoria extended beyond Bitcoin to other cryptocurrencies such as ether and dogecoin, which also experienced gains before dipping slightly on Tuesday morning in Europe. Investors are hopeful for an end to the regulatory scrutiny seen under the current U.S. Securities and Exchange Commission (SEC) chair, as Trump has indicated plans to replace Gary Gensler. Furthermore, Trump unveiled a new crypto business, World Liberty Financial, in September, signaling his broader commitment to the crypto space (Westbrook & Robertson, Reuters).
Justin D’Anethan, head of Asia-Pacific business development at Keyrock, noted that the rally is not just about reaching price milestones; it signals the market’s growing acceptance of Bitcoin as a politically favored asset. This optimism suggests that Bitcoin and other cryptocurrencies could continue to gain support under the new administration (Westbrook & Robertson, Reuters).
Final Thoughts
Bitcoin’s recent rally to nearly $90,000 has been fueled by investor optimism over Donald Trump’s crypto-friendly stance. The enthusiasm extends across the broader crypto ecosystem, as investors anticipate favorable policies that could elevate the status of digital assets and encourage further adoption. As always, it’s crucial for investors to stay informed and evaluate the potential risks and rewards of investing in this volatile yet promising asset class.
Sources:
Westbrook, T., & Robertson, H. (2024, November 12). Record-breaking Bitcoin rally nears $90,000, Trump boost. Reuters.
