The price of bitcoin hit a new high Wednesday as investors bet that former Donald Trump’s victory in the U.S. presidential election will be a boon for cryptocurrencies.
Bitcoin jumped nearly eight per cent in early trading, climbing above $75,000 US and smashing its previous record set in March. Other cryptocurrencies also soared, including ether, the world’s second most popular cryptocurrency after bitcoin, which rallied 8 per cent.
Another token, dogecoin, rocketed as much as 18 per cent. It’s the favorite cryptocurrency of billionaire Elon Musk, one of Trump’s most prominent supporters.
Trump was previously a crypto skeptic but changed his mind and embraced cryptocurrencies ahead of the election.
He has pledged to make America “the crypto capital of the planet” and create a “strategic reserve” of bitcoin. His campaign accepted donations in cryptocurrency and he courted crypto fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.
Bitcoin is up 77 per cent this year.
“Bitcoin is the one asset that was always going to soar if Trump returned to the White House,” said Russ Mould, investment director at AJ Bell, a British online investment platform. After touching its new high, the market is now speculating about “when, not if, it will smash through $100,000 US,” he said.
“Trump has already declared his love of the digital currency and crypto traders now have a new narrative by which to get even more excited about where the price could go,” Mould said.
But other experts warned of the risks.
“Investors should only dabble in crypto with money that they can be prepared to lose,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Because we’ve seen these wild swings in the past.”
Industry welcomes Trump
Crypto industry players welcomed Trump’s victory, in hopes that he would be able to push through legislative and regulatory changes that they’ve long lobbied for.
Trump had already promised that, if elected, he would remove the chair of the Securities and Exchange Commission, Gary Gensler, who has been leading the U.S. government’s crackdown on the crypto industry.
“Tonight the crypto voter has spoken decisively — across party lines and in key races across the country,” said Brian Armstrong, CEO of Coinbase, one of the biggest cryptocurrency exchanges.
“Americans disproportionately care about crypto and want clear rules of the road for digital assets. We look forward to working with the new Congress to deliver it,” Armstrong posted on X.
Streeter said Trump’s administration would most likely pursue “light touch regulation” for the crypto industry.
“Certainly that’s what crypto fans would want,” she said. “They want the sheen of legitimacy to be brought to crypto, but they don’t want regulations to be too onerous to stop opportunities and innovation.”