Bitcoin Reaches New All-Time High
The cryptocurrency surged by as much as 4.7%, reaching an unprecedented $80,092 on Sunday. This milestone marks a significant moment for the digital asset, bolstered by recent political developments in the United States.
Trump’s Pro-Bitcoin Campaign Promises
On the campaign trail, Donald Trump committed to positioning the US at the forefront of the digital-asset sector. His promises included building a strategic Bitcoin stockpile and appointing regulators with a positive view of cryptocurrencies. Following his stronger-than-expected performance in Tuesday’s election, where the Republican Party retained Senate control and approached a narrow House majority, Bitcoin’s momentum accelerated.
Market Reaction to Trump’s Victory
“With the dust from Trump’s victory still settling down, it was only a matter of time before a run-up of some sort occurred given the perception of Trump being pro-crypto, and that’s what we’re seeing now,” said Le Shi, Hong Kong managing director at market-making firm Auros.
Bitcoin Outperforms Traditional Investments
So far in 2024, Bitcoin has surged approximately 91%, supported by strong demand for US-based exchange-traded funds (ETFs) and interest-rate reductions from the Federal Reserve. The leading cryptocurrency’s performance surpasses returns on traditional assets like stocks and gold, reflecting a renewed confidence in the market.
Record Inflows into Bitcoin ETFs
The ETFs market, spearheaded by BlackRock Inc.’s $35 billion iShares Bitcoin Trust, showcased unprecedented activity. On Thursday, a record daily net inflow of nearly $1.4 billion was recorded, according to Bloomberg data. Just a day prior, the iShares ETF witnessed its highest trading volume to date, illustrating the significant impact of Trump’s electoral success on the crypto space.
Trump vs. Biden on Crypto Regulations
Trump’s supportive stance on digital assets marks a stark contrast to the regulatory approach under President Joe Biden. SEC Chair Gary Gensler frequently criticized the crypto sector for widespread fraud and misconduct. The agency’s intensified scrutiny, especially after the 2022 market downturn and the high-profile collapse of Sam Bankman-Fried’s FTX exchange, imposed stringent challenges for the industry.
Crypto’s Investment in Political Influence
Digital-asset firms and executives heavily invested in the US election campaign, backing candidates who would advocate for favorable policies. “Trump has promised supportive regulation, and the sweep of the House and the Senate makes the passage of crypto bills much more likely,” noted Noelle Acheson, author of the *Crypto Is Macro Now* newsletter.