The outcome of the US presidential election is being hailed as a significant win for the crypto industry, with Bitcoin's price soaring in the wake of Donald Trump's victory. The president-elect's win, who had promised during his campaign to make the US the "crypto capital of the planet", has boosted the market, with Bitcoin inching closer to the $90,000 on Tuesday.
This surge comes amid growing optimism that digital assets will benefit from a more crypto-friendly regulatory environment under Trump administration.
Trump's victory was also bolstered by the success of crypto allies in House and Senate races, following a massive $170-million campaign effort by the industry to advance its agenda. The rally in Bitcoin prices reflects market expectations that the new administration will be more favourable to cryptocurrency, with many predicting further price gains.
Bitcoin's value has risen more than 25% since Nov. 5, and several industry experts are bullish on its future. The cryptocurrency particularly spiked post Elon Musk's endorsement of Donald Trump as the 47th President of the United States of America in an X post dated July 13, 2024.
Matt Hougan, chief investment officer at Bitwise, told MarketWatch he expects Bitcoin to reach as high as $100,000 by the end of 2024, with the potential to hit $200,000 by the end of 2025.
"Bitcoin is now in price discovery mode after breaking through all-time highs early last Wednesday morning, when it was officially declared that Trump won the election," said Mike Colonnese, an analyst at H.C. Wainwright, in conversation with CNBC. "Strong positive sentiment is likely to persist through the balance of 2024, and we see Bitcoin prices potentially reaching the six-figure mark by the end of this year."
Trump's promises of a more crypto-friendly environment include appointing a pro-crypto chair to the Securities and Exchange Commission and creating a US Bitcoin reserve. He has also pledged to boost domestic Bitcoin mining. The Republican Party's increasing influence in Congress is expected to help push these policies through.
Bitcoin's rally is drawing increasing attention from traders. Chris Weston, head of research at Pepperstone Group, described the current bitcoin market as being in "beast mode", adding that traders are now questioning whether there’s still room for further gains or if a retracement is on the horizon.
"The question for traders not already set is whether there is still room to chase this red-hot play or wait for a slight retracement and for some of the heat to come out of the impulsive trend," Weston wrote in a note, Bloomberg reported.
Investor sentiment is also reflected in the options market, where traders are placing bets that Bitcoin will surpass $100,000 by the end of the year, according to data from the Deribit exchange. Meanwhile, MicroStrategy Inc.— the largest publicly traded corporate holder of Bitcoin outside exchange-traded funds—made a significant purchase of approximately 27,200 bitcoin, spending around $2 billion between Oct. 31 and Nov. 10.
Bitcoin was trading at $88,369.67, up 0.40%, or 355.14 points as of 11:32 a.m. IST, as bullish sentiment prevails.
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