As investors hoped that Donald Trump’s win in the U.S. presidential election would help cryptocurrencies, the price of bitcoin reached a new high on Wednesday and shares of companies involved in cryptocurrency soared.
Early trading saw a roughly 8% increase in Bitcoin, which broke its previous high established in March and surged past $75,000. Ethereum, the second-most popular cryptocurrency in the world after bitcoin, surged 8% along with other cryptocurrencies.
Dogecoin, another token, skyrocketed by up as 18%. Elon Musk, a billionaire and one of Trump’s most well-known supporters, prefers it as his cryptocurrency.
Shares of cryptocurrency companies outperformed the overall stock market. One of the largest bitcoin exchanges, Coinbase, increased by 17%. MicroStrategy, which claims to be the “largest corporate holder of bitcoin,” and online stockbroker Robinhood Markets, which provides cryptocurrency trading, both saw a 12 percent increase.
Before the election, Trump, who had previously been skeptical about cryptocurrencies, changed his opinion and welcomed them.
Making America “the crypto capital of the planet” and establishing a “strategic reserve” of bitcoin are two of his stated goals. He courted cryptocurrency enthusiasts at a bitcoin conference in July, and his campaign welcomed cryptocurrency contributions. Along with family members, he also started a new cryptocurrency trading business called World Liberty Financial.
According to Russ Mould, investment director at AJ Bell, a British online investing platform, “Bitcoin is the one asset that was always going to soar if Trump returned to the White House.” The market is now speculating about “when, not if, it will smash through $100,000” after reaching its latest high, he added.
“Traders of cryptocurrency now have a new narrative to get even more excited about where the price could go, as Trump has already declared his love for the digital currency,” Mould added.
However, several specialists cautioned about the dangers.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said that investors should only experiment with cryptocurrency with funds they are willing to lose. “Because these extreme swings have happened before.”
Players in the cryptocurrency sector applauded Trump’s win, hoping he would be able to enact the laws and regulations they had long pushed for.
Trump had previously said that he would fire Gary Gensler, the chair of the Securities and Exchange Commission, who has been spearheading the American government’s campaign against the cryptocurrency sector, if elected.
Coinbase CEO Brian Armstrong said, “Tonight, the crypto voter has spoken decisively — across party lines and in key races across the country.” Americans are disproportionately interested in cryptocurrency and want clear guidelines for using digital assets. To achieve it, we’re excited to collaborate with the new Congress,” Armstrong wrote on X.
According to Streeter, the Trump administration is expected to seek “light touch regulation” for the cryptocurrency sector.
“That’s definitely what cryptocurrency enthusiasts would want,” she said. “They want to give cryptocurrency a sense of legitimacy, but they don’t want regulations to be so onerous that they stifle creativity and opportunity.”
