Markets
Bitcoin surges as markets see increased likelihood of Trump victory
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Bitcoin hit a two-week high on Monday as betting markets suggested an increased chance of victory for the cryptocurrency-friendly candidate Donald Trump during the American presidential election.
The value of the world’s largest cryptocurrency, bitcoin, rose 6.2% to $63,622.09, according to CoinGecko.
The rally follows the dramatic assassination attempt on the former president SATURDAY.
“There is a ‘parallel’ to the assassination of President Reagan in 1981,” even though it was not an election year, Ben Emons, chief investment officer at FedWatch Advisors, said in an emailed note.
“After the incident, Reagan’s popularity skyrocketed amid a double-dip recession. The S&P 500, however, fell 9% in the aftermath due to economic malaise. But in the current economic climate, former President Trump’s popularity is likely to soar and have a positive impact on markets.”
Investors said over the weekend They expected trading related to Trump’s so-called victory to be boosted. This trading has expanded to include various crypto stocks such as Coinbase Global and minor Riot Control Platformswhich increased by 4.5% and 5.25% respectively in pre-market trading.
“The price of Bitcoin rose about 9% over the weekend, which could indicate that investors expect a Trump presidency to create a more favorable regulatory climate for the crypto industry,” Zach Pandl, head of research at Grayscale Investments, told CNBC via email.
Trump has yet to offer detailed proposals for regulating cryptocurrencies, but the Republican candidate is now widely seen as supportive of the sector — despite his past skepticism. He is scheduled to speak at a major annual bitcoin conference later this month.
The Trump campaign started accepting donations of the crypto industry in May and its the messages have become increasingly positive on the future of these digital assets. He also sought to to position oneself against Democrats who favor industry oversight, such as Sen. Elizabeth Warren.
“Additionally, macroeconomic policy changes under a second Trump presidency – including continued deficit spending, reduced U.S. leadership in international affairs, less independence from the Federal Reserve, and a desire for currency weakness to help reduce the trade deficit, among other things – could introduce downside risks to the U.S. dollar over the medium term. Any downside risks to the U.S. dollar could support Bitcoin prices,” Pandl added.
Last month, Standard Chartered analysts said that the US presidential election is the next key catalyst for bitcoin’s price and a Trump victory could push it to $150,000 by the end of the year.
“Cryptocurrencies have not had an easy time in recent months. We are currently in a period of slowdown in the previously booming capital flows into this market, which can be measured by the capitalization of stablecoins, which has frozen over the past two months,” Grzegorz Drozdz, market analyst at Conotoxia, told CNBC via email.
With a higher probability of a Trump presidency, and therefore a reduced risk of riots and destabilization in the United States, Drozdz now sees a potential “influx of confidence into the markets” that could have a positive impact on crypto and bitcoin in the coming weeks.