Republican presidential nominee and former U.S. President Donald Trump made a gesture at the Bitcoin 2024 event in Nashville, Tennessee, U.S., on July 27, 2024. Photo: Reuters
Bitcoin reached a new record high above $82,000 on Monday, driven by expectations of a cryptocurrency boom under a favorable regulatory environment following the election of Donald Trump as U.S. president and the victory of pro-crypto candidates in Congress. The world's largest and most recognized cryptocurrency has more than doubled from its yearly low of $38,505 and was last trading at $82,236, having earlier hit a record high of $82,527.
Trump embraced digital assets during his campaign, vowing to make the United States the 'crypto capital of the planet' and to build a national stockpile of bitcoin. 'Bitcoin's Trump-pump is alive and well... with Republicans poised to take control of the house, it seems the crypto crowd are betting on digital-currency deregulation,' said Matt Simpson, senior market analyst at City Index, referring to Republican control of both houses.
While Simpson cautioned that Trump's immediate priorities may lie elsewhere, crypto investors anticipate an end to heightened scrutiny under U.S. Securities and Exchange Commission Chair Gary Gensler, whom Trump has indicated he will replace. The cryptocurrency industry invested over $119 million in backing pro-crypto congressional candidates, many of whom secured their seats. In Ohio, one of the crypto industry's staunchest opponents in Congress, Senate Banking Committee Chair Sherrod Brown, was defeated, while pro-crypto candidates from both the Democratic and Republican parties won in Michigan, West Virginia, Indiana, Alabama, and North Carolina.
Trump also launched a new crypto venture, World Liberty Financial, in September. Although details about the business are sparse, investors have interpreted his personal interest in the sector as a positive sign. Billionaire Elon Musk, a key Trump ally, is also a supporter of cryptocurrencies. Eric Trump, one of the president-elect's sons and executive vice president of The Trump Organization, is set to be a keynote speaker at a bitcoin conference in Abu Dhabi next month, according to event organizers.
'The incoming Trump administration may lead to expedited regulatory clarity, enhanced institutional participation, improved market infrastructure, and broader mainstream adoption,' said Deutsche Bank research analyst Marion Laboure. 'Trump's pragmatic approach marks a clear departure from recent regulatory restrictions.'
Inflows into cryptocurrency exchange-traded funds (ETFs) have also increased since Trump's election victory. On Thursday, November 7, bitcoin ETFs saw their largest inflows on record, attracting a net $1.38 billion, according to data from Citigroup. 'There have been significant inflows across the board,' Citi analysts noted in a report. 'ETF inflows have been the dominant driver of Bitcoin returns, and we expect this to continue in the near-term,' they added.
Cryptocurrency gains have been widespread. Ether surpassed $3,200 for the first time in over three months over the weekend and was last trading at $3,182. Dogecoin, an alternative cryptocurrency that started as a satirical critique of the 2013 crypto frenzy, reached a three-year high. U.S.-listed cryptocurrency stocks surged in premarket trading, with crypto exchange Coinbase Global jumping more than 16%, and iShares Bitcoin Trust up 7.3%. Crypto miner Riot Platforms surged over 10%, while MicroStrategy, one of bitcoin's biggest corporate supporters, gained 11.3%.
Deutsche Bank's Laboure also anticipates rate cuts from the Federal Reserve to create a supportive environment for the cryptocurrency market.
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