Bitcoin
Bitcoin Jumps as Markets See Increased Chances of Trump Victory
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Bitcoin hit a two-week high on Monday as betting markets suggested a higher chance of victory for the crypto-friendly candidate Donald Trump in the US presidential election.
The value of the world’s largest cryptocurrency, bitcoin, rose 6.2% to $63,622.09, according to CoinGecko.
The rally follow the dramatic assassination attempt about the former president on Saturday.
“There is a ‘parallel’ to the assassination of President Reagan in 1981,” even though it was not an election year, Ben Emons, chief investment officer at FedWatch Advisors, said in an emailed note.
“After the incident, Reagan’s popularity skyrocketed amid a double-dip recession. The S&P 500, however, fell 9% in the aftermath due to the economic malaise. But in the current strong economy, former President Trump’s favorability is likely to skyrocket and impact markets positively.”
Investors said on the weekend they were hoping that the so-called Trump victory trade would get a boost. These trades broadened to include several cryptocurrency stocks, such as Coinbase Global and miner Riot platformswhich rose 4.5% and 5.25%, respectively, in pre-market trading.
“Bitcoin’s price rose about 9% over the weekend, which could indicate that investors are hoping that a Trump presidency will create a more favorable regulatory climate for the crypto industry,” Zach Pandl, head of research at Grayscale Investments, told CNBC in an email.
Trump has yet to lay out any detailed proposals on cryptocurrency regulation, but the Republican candidate is now seen as broadly supportive of the sector — despite his past skepticism. He is set to speak at a major annual bitcoin conference later this month.
Trump’s campaign started accepting donations of the cryptocurrency industry in May and its the message became increasingly positive about the future of these digital assets. He also sought to position oneself against Democrats who are in favor of controlling the industry, such as Senator Elizabeth Warren.
“In addition, macro policy changes under a second Trump presidency — including continued deficit spending, reduced U.S. leadership in international affairs, weaker Federal Reserve independence, and a desire for currency weakness to help reduce the trade deficit, among other things — could introduce downside risks to the U.S. dollar in the medium term. Any downside risks to the U.S. dollar could provide support for Bitcoin’s price,” Pandl added.
Last month, analysts at Standard Chartered said that the US presidential election is the next key catalyst for bitcoin’s price and a Trump victory could push it to $150,000 by the end of the year.
“Cryptocurrencies have not had an easy time in recent months. We are currently in a crisis of previously growing capital inflows into this market that can be measured by the capitalization of stablecoins, which has frozen in the last two months,” Grzegorz Drozdz, market analyst at Conotoxia, told CNBC in an email.
With a higher likelihood of a Trump presidency and the consequent reduced chances of unrest and destabilization in the US, Drozdz now sees a potential “influx of confidence into the markets,” which could positively impact cryptocurrencies and bitcoin in the coming weeks.