Bitcoin’s Meteoric Rise After Trump’s Victory

Bitcoin surged past a historic $80,000 on Sunday, setting an all-time high shortly after Donald Trump’s decisive victory in the U.S. presidential election earlier in the week. The world’s largest cryptocurrency has shown an impressive 65.4% rise from its yearly low of $38,505, recorded on January 23. Trump’s pro-crypto agenda, which emphasizes positioning the U.S. as “the crypto capital of the planet,” has fueled the market optimism and investor confidence.

Market observers attribute Bitcoin’s rally to Trump’s clear commitment to embracing digital assets. The President-elect has expressed plans to create a strategic Bitcoin stockpile and appoint regulators who favor digital asset growth. With Republicans securing the Senate and being on the brink of a narrow majority in the House, Trump’s win has only strengthened bullish sentiment in the crypto market. Le Shi, Hong Kong managing director at market-making firm Auros, remarked, “With the dust from Trump’s victory still settling down, it was only a matter of time before a run-up of some sort occurred given the perception of Trump being pro-crypto“.

Driving Factors: ETFs and Federal Reserve Policies

The cryptocurrency’s value has climbed 91% in 2024 alone, outpacing traditional investment avenues like stocks and gold. Analysts point to several key drivers of this surge: heightened demand for U.S.-based exchange-traded funds (ETFs) and recent monetary policies by the Federal Reserve. The approval of Bitcoin ETFs, including BlackRock Inc.’s $35 billion iShares Bitcoin Trust, has transformed market dynamics. Last week, the iShares ETF posted an unprecedented net inflow of $1.4 billion, and its trading volume hit record highs.

These ETF inflows, coupled with the Federal Reserve’s recent interest rate cuts, have provided additional fuel to Bitcoin’s remarkable ascent. The market response underscores growing institutional interest in digital assets, particularly as regulatory barriers begin to shift under Trump’s administration.

Shifting Regulatory Landscape

Trump’s favorable stance toward crypto marks a sharp departure from the previous administration. Under President Joe Biden, the Securities and Exchange Commission (SEC), led by Chair Gary Gensler, imposed strict oversight on the crypto sector. The agency intensified scrutiny following major disruptions in 2022, including the collapse of Sam Bankman-Fried’s FTX exchange. Gensler had frequently criticized the crypto market for being rife with misconduct.

In contrast, Trump’s agenda promises regulatory relief for digital assets. “Trump has promised supportive regulation, and the sweep of the House and the Senate makes the passage of crypto bills much more likely“, noted Noelle Acheson, author of the Crypto Is Macro Now newsletter. The crypto community responded enthusiastically, with industry players and executives investing heavily during the election campaign to back candidates aligned with pro-crypto policies.

As Trump prepares to take office, all eyes are on the evolving landscape for digital assets in the U.S. The prospect of supportive legislation and a crypto-friendly administration has set the stage for continued momentum in the digital currency market.

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