Bitcoin reached a new milestone by nearing $80,000 for the first time, driven by President-elect Donald Trump’s positive attitude towards digital assets and the potential for a Congress with pro-crypto legislators. The cryptocurrency surged by 4.3% to an all-time high of $79,771 on Sunday and maintained its value near $79,000. Other smaller tokens like Cardano and Dogecoin also experienced a rally in response.
During his campaign, Trump expressed his intention to position the US as a key player in the digital asset industry by establishing a strategic Bitcoin reserve and appointing regulators who support digital assets. Following the election results, where his Republican Party gained control of the Senate and is close to securing a narrow majority in the House, Bitcoin’s value surged as investors anticipated a crypto-friendly regulatory environment under Trump’s administration.
The digital currency has seen a 90% increase in value so far in 2024, driven by strong demand for specialized US exchange-traded funds and interest rate reductions by the Federal Reserve. The performance of Bitcoin has outpaced traditional investments like stocks and gold, with BlackRock Inc.’s iShares Bitcoin Trust ETF recording a record daily net inflow of nearly $1.4 billion. The surge in trading volume and investor interest in the ETF indicate the impact of Trump’s victory on the crypto market.
In contrast to Trump’s pro-crypto stance, President Joe Biden’s administration has taken a stricter approach towards digital assets. SEC Chair Gary Gensler has been critical of the sector, citing concerns about fraud and misconduct. The regulatory environment for crypto tightened after the 2022 market downturn and the collapse of fraudulent exchanges like FTX.
Digital asset companies and industry leaders invested heavily in promoting candidates supportive of their interests during the US election campaign. With Trump’s commitment to favorable regulations and his party’s control over Congress, the passage of crypto-friendly legislation is expected to become more feasible.
The surge in Bitcoin’s value and the broader crypto market reflects the growing influence of political developments on digital assets. Investors are closely monitoring the regulatory landscape and policy decisions that could shape the future of cryptocurrencies in the US and globally. As the market continues to evolve, the role of government support and regulatory clarity will be crucial in determining the long-term success of digital assets.
