Bitcoin surged close to $90,000 on Tuesday, fueled by expectations that President-elect Donald Trump will foster a crypto-friendly environment. The world’s largest cryptocurrency reached an impressive high of $89,982, marking a 30% increase since November 5. It later eased to $86,730, down 1.4%.
The surge comes alongside a remarkable rally in Tesla, up nearly 40% since the election results were announced. Investors believe that Trump’s presidency could benefit sectors tied to his network of allies and personal interests, including cryptocurrencies and tech giants.
“Crypto enthusiasts think they have a like-minded incoming president,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. He noted, however, that bitcoin’s valuation is notoriously volatile, lacking a traditional “valuation anchor,” which means sentiment-driven surges can be extreme.
Trump’s campaign promises included positioning the US as the “crypto capital of the planet” and accumulating a national reserve of bitcoin, stoking excitement among traders and mining firms. While the timeline and feasibility remain uncertain, this pledge has fueled speculation, driving up crypto-related stocks and market activity.
Crypto miner Riot Platforms jumped nearly 17% on Wall Street on Monday. Fellow miners MARA Holdings and CleanSpark leapt nearly 30%.
Software company and investor in bitcoin MicroStrategy announced it had spent about $2 billion buying bitcoin between Oct. 31 and Nov. 10. Shares rose 26% on Monday.
“Obviously (it’s) a clear Trump trade as he is so supportive of the industry, and this can only mean more demand both for crypto stocks as well as the currencies themselves,” Nick Twidale, chief market analyst at ATFX Global in Sydney, said of the bitcoin rally.
“The fact that bitcoin was trading near all-time highs when the election result came through meant that it had clean sky above.”
The euphoria extended across the crypto landscape with smaller tokens such as ether and dogecoin surging, although they dipped on Tuesday morning in Europe.
(With inputs from Reuters)
