Bitcoin surged close to $90,000 on Tuesday, fueled by a wave of optimism following Donald Trump's election as US president, with expectations that his administration will be favorable to cryptocurrencies. The world's largest cryptocurrency has been one of the most notable gainers since the election, reaching $89,982—a nearly 30% increase since November 5. It later dipped 1.4% to $86,730.
Bitcoin's surge is mirrored by Elon Musk's Tesla, which has risen nearly 40% since the election results were announced, as investors anticipate that Trump's allies and interests will thrive during his presidency. 'The crypto community believes they have a president-elect who shares their views,' said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. 'Bitcoin lacks a valuation anchor, making it particularly susceptible to positive sentiment, which can drive it much higher than other asset classes.'
During his campaign, Trump expressed support for digital assets, promising to make the United States the 'crypto capital of the planet' and to build a national stockpile of bitcoin. Although the specifics of how and when this might occur are unclear, the possibility has sparked a speculative frenzy in crypto mining and trading stocks. 'I believe it increases the likelihood that other nations will buy bitcoin to stay ahead of the US,' said Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital. 'It could also be a significant catalyst for US-listed bitcoin miners, given the potential for nationalization.'
Crypto miner Riot Platforms saw a nearly 17% jump on Wall Street on Monday, while fellow miners MARA Holdings and CleanSpark surged nearly 30%. Software company MicroStrategy, a major investor in bitcoin, revealed it had spent about $2 billion on bitcoin between October 31 and November 10, leading to a 26% rise in its shares on Monday. 'This is clearly a Trump trade, as his strong support for the industry can only increase demand for both crypto stocks and the currencies themselves,' said Nick Twidale, chief market analyst at ATFX Global in Sydney.
The optimism extended to smaller tokens like ether and dogecoin, which also saw significant gains, though they dipped on Tuesday morning in Europe. Crypto investors anticipate reduced scrutiny under the US Securities and Exchange Commission Chair Gary Gensler, whom Trump plans to replace. In September, Trump also launched a new crypto business, World Liberty Financial.
'What we're witnessing isn't just a price milestone; it's a sign that the market is increasingly accepting bitcoin as a stable, even politically favored, asset,' said Justin D'Anethan, head of Asia-Pacific business development at digital assets market maker Keyrock.
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