US Elections Drive Bitcoin To Record High As Trump Leads Vote Count
Bitcoin extended gains as Trump took an early lead, yet the race was far from settled
Bitcoin jumped to a record as traders around the world watched results trickle in from a US presidential election that pits digital-asset supporter Donald Trump against Kamala Harris, who served as vice president during a government crackdown on the industry.
The original cryptocurrency rose more than 8%, rising above $75,000 as of 10:08 p.m. in New York. That topped the March record set during the euphoria that followed the launch of US spot-Bitcoin exchange-traded funds.
Bitcoin extended gains as Trump took an early lead, yet the race was far from settled late Tuesday evening. With polls closed in more than two-thirds of states, Trump had taken preliminary leads in Georgia and North Carolina, two key swing states, while vote counting in others was in its early stages.
“It has to be because the early numbers are looking good for Trump,” said Fredrick Collins, chief executive officer and founder of crypto data platform VeloData. “Bitcoin is one of the top instruments for trading the election tonight in my opinion. It’s relatively liquid and very tied to the outcome. So it’s pretty safe to assume any increases in price are tied to increases in Trump’s prospects of winning.”
Other tokens rallied as well, with Ethereum, the second-largest cryptocurrency, jumping 6.5%. Dogecoin, the so-called memecoin also known as Doge that’s been promoted by Trump supporter Elon Musk, surged 18%.
“Doge, because of its association with Musk, has been a particular beneficiary,” said Cosmo Jiang, general partner at crypto-focused investment firm Pantera.
Crypto muscled onto the high table of politics courtesy of a giant campaign-finance war chest funded by the industry to further its agenda. Bitcoin is viewed by some as a so-called Trump trade because Republican presidential nominee Trump embraced digital assets during his campaign.
Trump staked out ground as the candidate most-friendly to the industry by vowing to make the US the crypto capital of the planet, create a strategic Bitcoin reserve and appoint regulators who love digital assets should he return to the White House. The former president has bolstered his support among crypto enthusiasts by launching his own projects. Harris has adopted a more measured approach, pledging to support a regulatory framework for the industry.
Volatility Expected
Traders were bracing for potentially pronounced market volatility stemming from results of an election that polls show is a dead heat. The 30-day gauge of implied Bitcoin swings reached the highest level since political upheavals, including President Joe Biden’s exit from the race, roiled investors in July. The index, compiled by CF Benchmarks Ltd., is derived from CME Group Bitcoin options pricing.
The options market was signaling expected moves of about 8% in either direction the day after the vote, compared with a typical 2% rise or fall on a normal day, said Caroline Mauron, co-founder of Orbit Markets, a provider of crypto derivatives liquidity.
Investors in spot-Bitcoin ETFs investors took chips off the table a day before the election, with the 12 funds seeing a record outflow of $579.5 million on Monday, according to data compiled by Bloomberg.
Prior to the election taking over the focus of the market, the price of Bitcoin was lifted this year by strong flows into the ETFs. Funds from issuers such as BlackRock Inc. and Fidelity Investments have attracted about $23.6 billion of net inflows this year, data compiled by Bloomberg show. The SEC grudgingly approved the funds after a court reversal in 2023. Their launch was one of the most eagerly anticipated events in digital-asset history.
Industry Expectations
Crypto-industry executives are optimistic that either of the candidates’ position toward digital assets would be in sharp contrast to the crackdown on the sector under President Joe Biden that saw numerous companies hit with enforcement actions from the SEC.
Digital-asset companies often complain that officials under the Biden administration chose a path of regulation through enforcement rather than creating a clear new legal framework for the nascent market.
SEC Chair Gary Gensler is a critic of the industry’s alleged noncompliance, repeatedly labeling the sector as rife with fraud and misconduct. The agency cracked down on crypto following a 2022 market rout and collapses such as the bankruptcy of Sam Bankman-Fried’s fraudulent FTX exchange.
