Cryptocurrency surges to record as traders bet on favourable Trump-led regulation

Bitcoin has rallied past $US81,000 ($123,120) for the first time, boosted by president-elect Donald Trump’s embrace of digital assets and the prospect of a Congress featuring pro-crypto lawmakers. Mr Trump was declared the winner in Arizona, marking a clean sweep of the seven US battleground States. His decisive victory in the presidential election has prompted celebratory chest-thumping from the digital-asset industry, which spent over $US100 million backing a range of crypto-friendly candidates. The largest token climbed as much as 6.1 per cent on Sunday and extended gains to hit an unprecedented $US81,891 on Monday, before changing hands at $US81,244 in early London trade. Bullish sentiment lifted smaller coins too, including Dogecoin, a meme-crowd favourite promoted by Trump supporter Elon Musk. “With the dust from Trump’s victory still settling down, it was only a matter of time before a run-up of some sort occurred given the perception of Trump being pro-crypto, and that’s what we’re seeing now,” said JULe Shi, Hong Kong managing director at market-making firm Auros. Mr Trump vowed on the campaign trail to put the US at the centre of the digital-asset industry, including creating a strategic Bitcoin stockpile and appointing regulators enamoured with digital assets. The stockpile was to come from the more than $US16 billion in Bitcoin the US Government has amassed through asset seizures. Mr Trump, who once called crypto a “scam”, has also vowed to oust US Securities and Exchange Commission chair Gary Gensler over his hardline approached to the cryptocurrency industry. Jubilant traders for the moment are paying little heed to questions such as the speed JUof likely implementation or whether a strategic stockpile is a realistic possibility. His broader agenda of stoking domestic economic growth, tax cuts and reducing red tape has fuelled a buying spree across stocks, credit and crypto. The S&P500 equity index last week hit its 50th record this year. Bitcoin has added about 94 per cent so far in 2024, helped by robust demand for dedicated US exchange-traded funds and interest-rate cuts by the Federal Reserve. The rise in the token, which also scaled fresh records after Tuesday’s US vote, exceeds the returns from investments such as stocks and gold. The ETFs, powered by BlackRock Inc.’s $US35 billion iShares Bitcoin Trust, posted a record daily net inflow of almost $US1.4b on Thursday, according to data compiled by Bloomberg. A day earlier, the iShares ETF’s trading volume jumped to an all-time peak — all signs of how Trump’s victory is reshaping crypto. Ether has eclipsed Bitcoin’s rise, up 30 per cent in the past week. The total market cap of all spot bitcoin ETFs is now above $US80b, and in the past three trading days alone, the spot funds collectively added $US2.3b. “We believe a significant portion of the institutional market de-risked in the lead-up to the election and is now re-entering post Trump’s win, creating material buying pressure — this is likely to be ongoing for some time yet,” said Richard Galvin, founder of crypto-focused investment firm DACM. Mr Trump’s stance contrasts with a crackdown on digital assets under President Joe Biden. Mr Gensler repeatedly labelled the sector as rife with fraud and misconduct. The agency turned the screws on crypto following a 2022 market rout and a litany of collapses, notably the bankruptcy of Sam Bankman-Fried’s fraudulent FTX exchange. Digital-asset companies spent heavily during the election campaign to boost candidates viewed as favourable to their interests. Against that backdrop, Mr Trump did an about-face, becoming a supporter of an industry he once criticised. “Trump has promised supportive regulation, and the sweep of the House and the JUSenate makes the passage of crypto Bills much more likely,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.