BITCOIN HITS $82,000 FOR THE FIRST TIME AS TRUMP WIN BOOSTS CRYPTO PROSPECTS

Mon 11 November 2024:

Bitcoin has broken through $82,000 on so-called ‘Trump trades’ – with investors betting that a second Donald Trump administration will be more favourable towards the cryptocurrency.

Bitcoin, the world’s biggest cryptocurrency, touched $82,413 this morning, and is now trading at $82,105.

AJ Bell investment director Russ Mould said:

Bitcoin always seemed a likely beneficiary of a Trump victory and so it is proving as the cryptocurrency hits a new record high.

It’s not just the incoming occupant of the White House which has helped bitcoin, there have also been down-ticket victories for candidates who have a positive stance on the asset class. Notably, one of its main critics, Senate banking chair and Democrat Sherrod Brown, fell to his Republican opponent and a crypto fan Bernie Moreno.

The dollar has also gained, rising to a four-month high, as Trump is expected to usher in more inflationary policies, which would limit the Federal Reserve’s scope for further interest rate cuts.

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The dollar is up by 0.4% against a basket of other major currencies. The euro lost nearly 0.6% to $1.0657, its lowest level since June. Investors worry about potential US tariffs that would damage the eurozone and global economy, once Trump takes office.

“Donald Trump’s victory drove (stock) indices to new all-time records with small caps outperforming sharply and hitting highs not seen since October 2021,” said a note from investment firm Edmond de Rothschild, which added that many of the price shifts were “volatile, speculative and sometimes disconnected from fundamentals”.

The Republican party is edging closer to sweeping both chambers of Congress, taking the Senate on election night and with Edison Research projecting it so far to have 214 seats of 218 needed for control of the House, compared to 205 for Democrats.

Investors expect Trump’s second term in office will bring equities-boosting tax cuts and looser regulations.

The crypto industry believes Trump’s victory is a bullish sign for bitcoin and other digital currencies. Although Trump was once a bitcoin skeptic, once saying it “was based on thin air,” he has fully embraced crypto in recent months — unlike the Biden administration, which has sought to rein in crypto.

A big reason Trump has changed his tune on crypto: He now has a financial stake in it. In September, Trump and his children started a new crypto business called World Liberty Financial.

“It’s very young and very growing,” Trump said of the cryptocurrency industry on September 16 while unveiling World Liberty Financial. “I do believe in it.”

The Biden administration, by contrast, has been far more skeptical of crypto. Securities and Exchange Commission Chairman Gary Gensler said in June 2021, in one of his first speeches in his then-new job, that crypto was “ripe with fraud, scams and abuses.”

Trump said in August that cryptocurrencies could “define the future,” adding he wanted it “mined, minted and made in the USA.” The president-elect also proposed a strategic national bitcoin stockpile, akin to America’s strategic petroleum reserve, directly purchasing and investing in cryptocurrencies as a national security measure.

Elon Musk, one of Trump’s most visible and ardent supporters, is a notorious crypto bull. Musk’s favorite coin, Dogecoin, surged more than 20% on Sunday and had been soaring all last week.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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