After an upsurge triggered by Donald Trump’s victory in the American presidential election last week, the price of Bitcoin and other cryptocurrencies has climbed drastically.
Let’s take a look at some of the world’s popular cryptocurrencies that saw massive jumps following the victory of Trump in the U.S. presidential election, according to the data by CoinMarketCap.
Price rise of cryptocurrencies
Bitcoin: The price of the world’s biggest cryptocurrency, Bitcoin, was $68,874.17 on November 5. And, now as on November 12, the price has reached $89,719.55.
Ethereum: The price of Ethereum was $2,459. 62 on November 5. Now, the price has reached $3,382.49.
BNB: The price of BNB was $562.80 on November 5. Now it is $665.12.
Solana: The price of Solana was $166.35 on November 5. It has reached $223.01 now.
Avalanche: The price of Avalanche was $24.04. It is now $37.20.
XRP: The price of XRP was $0.5132 on November 5. And, now as on November 12, the price has reached $0.6279.
Cardano: The price of Cardano was $0.3358 on November 5. The price has reached $0.6076 now.
Dogecoin: The price of Dogecoin was $0.1772 on November 5. Now, as on November 12, the price has reached $0.4160.
Tether: The price of Tether was $0.9994 on November 5. It has reached $1.0022 now.
Shiba Inu: The price of Shiba Inu was $0.00001800 on November 5. The price has now reached $0.00002955.
What drives the crypto rally?
Bitcoin has historically increased following U.S. presidential elections, which is consistent with this post-election spike. In the 90 days after Barack Obama’s victory in 2012, the price of Bitcoin increased by 87 percent. Following Trump’s election in 2016, it increased by 44 percent, and following Biden’s victory in 2020, it soared by 145 percent. The Bitcoin halving, a four-year event that reduces mining earnings by 50 percent, has taken place every election year. Also, the speculation on possible pro-crypto regulatory reforms in the U.S. has contributed significantly to the recent rise. The day following the election, Bitcoin’s value rose 8 percent as there were rumours that Trump would assign crypto-friendly individuals to important regulatory positions.
Growing interest from institutional investors has also contributed to the increase in Bitcoin’s value. Demand has increased since the U.S. legalized Bitcoin exchange-traded funds (ETFs) earlier this year, giving institutions wider access to the cryptocurrency. ETFs provide institutional and individual investors with exposure to Bitcoin without requiring them to handle the cryptocurrency directly. The Federal Reserve’s recent rate decrease of 25 basis points in November, which caused investor sentiment to move towards alternative assets, is also credited with the increase. As inflation worries subside, the shift in monetary policy suggests a more accommodating stance, increasing demand in assets like Bitcoin.
Read: Bitcoin surges to record high of $81,899 as Trump’s election boosts crypto market
Trump backs crytpo industry
While a number of pro-crypto politicians succeeded in elections that were further down the ballot, president-elect Donald Trump has pledged to support the cryptocurrency sector. Trump, who has vowed to make the United States the ‘crypto capital of the planet’, backed the crypto business in opposition to the Securities and Exchange Commission’s more stringent regulatory stance under President Joe Biden. Trump’s support for cryptocurrency is a reversal of his earlier criticism of the sector, which he described as a ‘scam’ and a catastrophe waiting to come in 2021.
According to several media reports, Trump, at a July Bitcoin conference in Nashville, pledged to keep 100 percent of all the Bitcoin the U.S. government currently holds or acquires into the future. In September, Trump also introduced World Liberty Financial, a new cryptocurrency company. Despite the lack of information about the company, investors have interpreted his personal involvement in the industry as a positive indicator.
Cryptocurrency corporations spending
According to a report by Public Citizen, a nonprofit consumer advocacy organization, Crypto companies invested heavily to ensure that candidates in the 2024 elections prioritize crypto regulation. Over $119 million in actual money was poured into the 2024 elections by crypto-sector firms, namely Coinbase and Ripple. Nearly all of this money had gone into super PACs that support pro-crypto politicians and target crypto opponents. Fairshake PAC, a super PAC that received $202.9 million, is the main recipient of the corporate cryptocurrency funds. Fairshake received $107.9 million, or 53 percent, of its financing directly from companies that stand to gain from the PAC’s initiatives, primarily Coinbase and Ripple.
Future of cryptocurrency
Long investments in Bitcoin futures have increased as a result of current market circumstances, with investors placing bets on further price gains. Although this speculative activity may increase volatility, it also offers opportunity for profitable transactions at appropriate times. More institutional involvement is expected if encouraging rules and regulations are maintained, which might signal the end of the ‘crypto winter’ and strengthen the market for digital assets. With continued institutional support, growing ETF markets, and supportive legislation, Bitcoin may be able to reach its next goal of $100,000.
Bitcoin’s price will likely breach the $100,000 mark following the election win. A high open interest (OI) in futures markets along with the increasing market dominance of stablecoins suggest traders are positioning themselves for high volatility in the price of Bitcoin. With the market capitalization of stablecoins hitting a new high and fluctuating around $160 billion, there is room for significant leverage in the market, potentially pushing BTC to reach $100,000 within the next three months, said Mohamed Hashad, chief market strategist, at Noor Capital.
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