Bitcoin rallied overnight, hitting an all-time high as former President Donald Trump defeated Vice President Kamala Harris to win the White House.
The price of the flagship cryptocurrency was higher by 7% at $74,445.47, according to Coin Metrics. Earlier, it rose to a fresh record of $75,384.69. The record to beat was $73,797.68, which it first reached on March 14.
“The themes around the Trump trade for crypto are deregulation, potential tax cuts for an asset that is both held long term but also day traded, less dependency on parts of government like financial institutions and the Fed — or at least an alternative for decentralized currency — and overall support of risk assets and the growth of crypto … is really what’s making it grow,” Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, told CNBC.
Ether surged 8%, while the token tied to its competitor, Solana, rocketed 11%. Payments token XRP jumped more than 4%. Meanwhile, memecoins soared, with dogecoin up more than 20%.
In stocks, crypto exchange Coinbase rallied 21% and is on pace for its best day since July 2023. Robinhood, up 25%, is heading for its best day since May 2022. MicroStrategy, which trades as a high beta play on the price of bitcoin, advanced 14%.
While bitcoin is benefitting from its inflation hedge narrative, investors of other cryptocurrencies and Coinbase are betting the U.S. regulatory environment will be more supportive of the crypto industry, as promised by Trump on the campaign trail.
Voters in this election were concerned about the state of the government deficit, which rose 8% in the 2024 fiscal year to $1.8 trillion, and increased tax cuts promised by both Trump and Vice President Harris. Bitcoin, like gold, is seen by many investors as a hedge against the potential for fiscal and monetary policy that combine to reduce the value of the dollar and lift inflation.
Trump had presented himself as the pro-crypto candidate early in the race and courted the industry directly. That included declarations that he would install a crypto advisory council in his first 100 days in office, establish favorable regulation to encourage domestic “made in the USA” bitcoin mining, launch a strategic national bitcoin stockpile and – what perhaps resonated most strongly with the industry – replace Securities and Exchange Commission chair Gary Gensler.
Gensler has become an adversary to the crypto industry, which has long been frustrated with the refusal of the SEC, under his leadership, to provide clear guidance for U.S. crypto businesses – choosing instead to regulate by enforcement, the industry says. Because of that, largely, this year’s presidential election has been called the most important one in the crypto industry’s lifetime.
“While President-elect Trump has claimed to make the U.S. the ‘crypto capital’ of the world, the details of his plans remain to be seen, and I expect it to take some time to truly understand his stance towards crypto,” said Anthony Yeung, global head of strategic development at CoinCover.
“It’s in the interest of the industry that the U.S. moves sooner rather than later when it comes to crafting a regulatory framework,” he said. “What it needs is targeted and proportionate regulation that prioritizes consumer protection and encourages innovation. Striking this balance will require close collaboration between regulators, policy makers and industry participants.”
In the 2012, 2016 and 2020 elections, bitcoin saw returns of roughly 87%, 44% and 145% in the 90 days following election day, respectively. That’s in part because election years happen to fall on Bitcoin halving years, when the supply of the cryptocurrency ratchets downward. Post election returns have also tended to align with major Federal Reserve policy shifts. This year, the market is looking forward to further interest rate reductions.
