Bitcoin surpassed US$82,000 (R$478,000) for the first time, driven not only by favorable signals for digital assets by the president-elect of the United States, Donald Trump, but also by the prospect of a Congress with very pro-cryptoactive legislators.
Trump was declared the winner in Arizona, marking the victory of the seven most contested states in the US electoral battleground. His decisive victory in the presidential election prompted the digital asset industry to celebrate, spending more than $100 million in donations to support a range of cryptocurrency-friendly candidates.
The largest token, Bitcoin, rose up to 6.1% on Sunday and extended gains to reach an unprecedented value of US$82.5 thousand, or R$479.23 thousand, at 8:45 am. Bullish sentiment also lifted smaller coins, including Dogecoin, the favorite of the meme crowd promoted by billionaire Elon Musk, a Trump supporter and currently the richest man in the world according to the Forbes billionaires list.
“With the dust still settling from Trump’s victory, it was only a matter of time before some sort of currency appreciation occurred. Given the perception that Trump was in favor of cryptocurrencies, and that is what we are seeing now,” said Le Shi, managing director of Auros.
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Trump’s agenda
During the campaign, Trump promised to put the US at the center of the digital asset sector, including creating a strategic Bitcoin stockpile and appointing enthusiastic digital asset regulators. At the moment, excited investors are paying little attention to issues such as the speed of likely implementation or whether a strategic stockpile is a realistic possibility.
His broader agenda of stimulating domestic economic growth, cutting taxes and reducing bureaucracy has fueled a wave of buying in stocks, credit and cryptocurrencies. The S&P 500 stock index last week hit its 50th record high this year.
Bitcoin is up about 95% so far in 2024, helped by strong demand for dedicated US exchange-traded funds and interest rate cuts by the Federal Reserve. The rise of the token, which also reached new records after Tuesday’s vote in the US, exceeds the returns on investments such as stocks and gold.
The ETFs, powered by BlackRock Inc.’s $35 billion iShares Bitcoin Trust, saw a record daily net inflow of nearly $1.4 billion on Thursday, according to compiled data by Bloomberg. A day earlier, iShares ETF trading volume jumped to an all-time high — all signs of how Trump’s victory is reshaping crypto.
READ MORE: US cryptocurrency sector hopes for a friendlier Washington — whoever wins the White House
Institutional demand
“We believe a significant portion of the institutional market has pulled out of risk in the run-up to the election and is now re-entering following Trump’s victory, creating material buying pressure – this will likely continue for some time,” said Richard Galvin, founder of DACM crypto-focused investment firm.
Trump’s stance contrasts with the crackdown on digital assets during President Joe Biden’s administration. Securities & Exchange Commission Chairman Gary Gensler has repeatedly labeled the industry as rife with fraud and misconduct. The agency came to control cryptocurrencies after a market defeat in 2022 and a series of collapses, most notably the bankruptcy of Sam Bankman-Fried’s fraudulent FTX exchange.
Digital asset companies spent heavily during the election campaign to boost candidates seen as favorable to their interests. Against this backdrop, Trump did an about-face, becoming a defender of an industry he labeled a fraud.
“Trump has promised to support regulation, and the victory in the House and Senate makes passage of cryptocurrency bills much more likely,” wrote Noelle Acheson, author of the newsletter Crypto Is Macro Now.
