Bitcoin surged close to $90,000 on Tuesday, driven by excitement since Donald Trump was elected U.S. president. People expect his administration to be friendly towards cryptocurrencies.
Bitcoin, the world’s biggest cryptocurrency, has been one of the most notable movers since the election. It reached $89,982, a 30% increase since November 5. It was last down 1.4% at $86,730.
Bitcoin is rising along with Tesla, Elon Musk’s car company, which is up nearly 40% since the election results. Investors believe Trump’s friends and interests will benefit while he is in office.
Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said, “Crypto enthusiasts think they have a like-minded incoming president.” He added that Bitcoin’s value is hard to determine, so when people are very positive, its price can rise more than other assets.
During his campaign, Trump supported digital assets and promised to make the U.S. the “crypto capital of the planet” and to build a national stockpile of Bitcoin.
Matthew Dibb, chief investment officer at Astronaut Capital, said, “I think it increases the chances that other countries will buy Bitcoin to get ahead of the U.S.” He also mentioned that it could be a big boost for U.S. Bitcoin miners if they get nationalized.
Crypto miner Riot Platforms jumped nearly 17% on Wall Street on Monday. Other miners, MARA Holdings and CleanSpark, rose almost 30%. Software company MicroStrategy, which invests in Bitcoin, announced it had spent about $2 billion buying Bitcoin between October 31 and November 10. Its shares rose 26% on Monday.
Nick Twidale, chief market analyst at ATFX Global in Sydney, said the Bitcoin rally is clearly linked to Trump, who supports the industry. This means more demand for both crypto stocks and the currencies themselves.
Bitcoin was trading near all-time highs when the election results came in, which helped its rise. The excitement spread across the crypto market, with smaller tokens like ether and dogecoin also surging, although they dipped on Tuesday morning in Europe.
Crypto investors hope for less scrutiny under U.S. Securities and Exchange Commission Chair Gary Gensler, whom Trump has said he will replace. Trump also launched a new crypto business, World Liberty Financial, in September.
Justin D’Anethan, head of Asia-Pacific business development at Keyrock, said, “What we’re seeing isn’t just a price milestone; it’s a signal that the market is warming to the idea of Bitcoin as a more stable, even politically favoured, asset.”
It’s not clear how or when these changes will happen, but the possibility has driven a speculative surge in crypto mining and trading stocks.