Bitcoin traded near the $90,000 level on Tuesday amid rising optimism that the election of Donald Trump as U.S. president will bring on a crypto-friendly administration. Since his election as president, the world’s biggest cryptocurrency has continued to surge, becoming one of the market’s centers of attention.
Bitcoin reached $89,637 in Asia, up over 25 percent since November 5, the U.S. election day. As of 6:11 GMT, the crypto has lost some of its gains, dipping 0.45 percent to $88,368.
Bitcoin’s recent surge also coincides with the meteoric rise in Tesla stocks, which witnessed almost a 40 percent surge since voting results started rolling out. Tesla CEO Elon Musk was among the largest supporters of Trump’s campaign, signaling a positive outlook on the company’s performance under Trump’s administration.
National crypto holding prospects boost appeal
Analysts noted that more demand both for crypto stocks as well as the currencies themselves is expected under Trump’s support of the industry.
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and accumulate a national stockpile of Bitcoin. The path of policy regarding the crypto market is still uncertain. However, the possibility of more supportive policies drove a speculative surge in crypto mining and trading stocks.
Accumulating a national stockpile of Bitcoin in the U.S. may also raise demand in other countries trying to get ahead of the curve in national holdings of cryptocurrencies.
Institutional appetite for Bitcoin grows
Institutional appetite for Bitcoin is also growing at a time when interest rates are set to fall sharply and risk assets are gaining more traction. Monthly inflows to Bitcoin ETFs are picking up significantly, with over $5 billion in net flow in October.
“A pro-crypto regulatory environment will provide air cover for institutional investors who have long wanted to allocate to the space. It’s a game-changer. An equal part of this rally is that people have stopped selling. Long-term owners are no longer willing to part with Bitcoin below $100k, and short-sellers don’t want to step in front of a freight train,” stated Bitwise chief investment officer Matt Hougan.
Read | How will the US election affect the stock market and trade: Insights and impacts
Crypto market sees positive momentum
Crypto miner Riot Platforms jumped nearly 17 percent on Wall Street overnight and rose further in after-hours trade. Meanwhile, other miners line MARA Holdings and CleanSpark surged by nearly 30 percent. In addition, software company and Bitcoin investor MicroStrategy announced that it had spent around $2 billion on Bitcoin between October 31 and November 10. The company’s shares rose 26 percent and were still gaining in after-hours trade.
Bitcoin optimism extended across the crypto market with smaller tokens such as Ethereum and Dogecoin having surged.
“The asset is now in price discovery, and the momentum from this could continue to push the price higher, meaning Bitcoin could potentially reach six figures within a few months,” said Josh Gilbert, market analyst at eToro.
Analysts warned, however, that Trump’s near-term priorities will likely divert to other matters but crypto investors see an end to scrutiny under U.S. Securities and Exchange Commission chair Gary Gensler, whom Trump has said he will fire.
The cryptocurrency industry spent more than $119 million backing pro-crypto congressional candidates. In Ohio, one of the crypto industry’s biggest opponents in Congress, Senate Banking Committee Chair Sherrod Brown was removed. In addition, pro-crypto candidates from both the Democratic and Republican parties won in Michigan, West Virgina, Indiana, Alabama, and North Carolina.
Trump also launched a new crypto business, World Liberty Financial, in September. Although details about the business are few, investors have taken his personal interest in the sector as a friendly signal.
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