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Donald Trump's win has lit a fire under cryptos, with Bitcoin skyrocketing past $81,700 on Monday and widening the gap with Wall Street stocks despite their new record highs.
The OG token's historic record rally is being driven by Trump's embrace of cryptos and a pro-digital assets Congress.
The red wave in the US has led to a green wave across digital assets over the past week.
The crypto industry, which invested over $100 million in supporting various crypto-friendly candidates in the US elections, is clapping its hands to celebrate Trump's resounding victory in the White House.
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Bitcoin was trading at around $80,800 after rising about 6% on Sunday and reaching an all-time high of $81,497 early in Asia on Monday.
Just last week, the crypto reached a fresh record of above $76,000, breaching the nearly $74,000 hit in March after approving Bitcoin ETFs in January.
The surge in Bitcoin is mainly due to the wider adoption of cryptos in large institutional investors' portfolios, with the investor's Trump trade adding to the bullish tone.
To give some context, the top token is up nearly 18% in the last week, over 30% in the past month, and more than 120% in the past year.
The market cap of Bitcoin has surged past $1.6 trillion from below $900 billion a year ago.
Altcoins also saw gains due to the bullish mood, like Dogecoin, a meme-crowd favourite created as a joke that Trump supporter Elon Musk has been endorsing for a while now. That dog is now 89% up over the past week and 25% up since yesterday alone to sit at $0.2846.
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Bitcoin Widens Gap With Record High Stocks
While campaigning, President-elect Trump promised to make the United States the global leader in digital assets by implementing measures such as building a strategic Bitcoin stockpile and selecting regulators who are passionate about the technology.
At the moment, the jubilant traders are paying little attention to concerns about the feasibility of a strategic stockpile and the expected pace of implementation.
Trump has gone on a buying binge in the stock market, credit markets, and cryptocurrency as part of his larger plan to spur domestic economic development, lower taxes, and reduce red tape.
The S&P 500 stock index reached a new high last week, marking a half-century of fresh records this year.
The Federal Reserve's interest rate cuts and strong demand for US-based exchange-traded funds increased Bitcoin's value by approximately 93% in 2024.
After Tuesday's US vote, the token's value soared to new heights, outpacing the returns of investments like near-record-high equities and gold.
POTUS-elect Trump's support for the digital asset sector and pledge to enact rules that benefit it have contributed to record daily net inflows of $1.38 billion into US exchange-traded funds that invest in Bitcoin.
According to data collated by Bloomberg, about 81% of Thursday's deluge, which came a day after the ETF's trading volume reached an all-time high, was attributed to BlackRock's iShares Bitcoin Trust.
The fund's net subscriptions, which are known by the acronym "IBIT," were a record-breaking $1.1 billion.
With investor demand skyrocketing, Bitcoin has established new records daily.
Aren't Investors Bullish Enough Already?
The top token's outperformance comes despite bets of more riches on Wall Street after a rally that has seen stocks add more than $2 trillion over the last week.
An indiscriminate risk surge has boosted stock prices by trillions of dollars.
However, many Wall Street pros have questioned the longevity of this rally throughout the year.
They have been completely wrong, with the exception of a brief summer market jitter.
A new worry emerged after Trump's re-emerging presidency and the accompanying asset price surge: the possibility that investors aren't bullish enough.
Over $2 trillion in stocks increased during last week's trading sessions, with a $20 billion inflow to funds on Wednesday contributing significantly.
The near-unanimous belief that Trump's pro-growth pledges, such as tax cuts and deregulation, will unleash additional benefits in an already thriving economy, coinciding with the Fed's shift toward an easy-money attitude, is the driving force behind the surge.
Since the beginning of this election cycle, those worried about the hefty cost of fiscal stimulus have focused their criticism on bonds.
However, even Treasury yields began to level out towards the end of last week.
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Now, Wall Street is rushing to forecast the extent to which the everything-boom will extend and is still falling short on year-end predictions, with those levels already reached.
Bitcoin is on top of that projection versus the reality mismatch heap.
According to VanEck's Matthew Sigel, the bull thesis is "stronger than ever" as Bitcoin's price broke $75,000 for the first time. Next year, $180,000 is conceivable, and by 2050, it will be a chilly $3 million.
One of the bullish predictions for financials came from seasoned analyst Mike Mayo, who predicted a "paradigm shift" for US banks.
There are many more analysts riding the optimistic bandwagon, not only Mayo.
Lenders anticipate increased business due to Trump's campaign pledges, including several tax cuts.
The consensus is clear: bank stock prices haven't been this good in years, even though others are wary due to the president-elect's unpredictable track record of fulfilling his promises.
Trump's position is in contrast to that of Joe Biden, who cracked down on digital assets.
Gary Gensler, the Securities and Exchange Commission (SEC) chair, regularly characterized the industry as plagued by fraud and misbehaviour.
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Following a market crash in 2022 and several collapses, most notably the bankruptcy of Sam Bankman-Fried's fake FTX exchange, the agency clamped down on cryptocurrency.
Companies with digital assets spent a lot of money on political ads supporting candidates they thought would benefit their bottom line.
Given this context, Trump reversed his position and endorsed a sector he had previously denounced as a fraud.
Elsewhere
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Blockcast
This week's Blockcast features Aethir Co-Founder, Mark Rydon, who tells Blockhead why he decided to take on the challenges with centralized GPU clouds, such as Google's Stadia, which struggled to provide low-latency gaming services economically.
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Events
Devcon (Bangkok, 12-15 November 2024)
Following Devcon Bogota in 2022, the Ethereum Foundation is set to host Devcon SEA, the 7th edition of its premier developer and community conference.
This landmark event is expected to bring together a diverse group of individuals, including developers, researchers, academics, and community members, to explore the future of Ethereum and its potential to reshape society.
Tickets are available here, with discounts for local builders, students and teachers, and youth.
Consensus (Hong Kong, 18-20 February)
Consensus is heading to Hong Kong, bringing together the industry’s most important voices from East and West for pivotal conversations and deal-making opportunities.
Consensus Hong Kong convenes global leaders in tech and finance to debate pressing issues, announce key developments and deals, and share their visions for the future.
Use promo code BLOCKDESK20 at checkout for a 20% discount on tickets here.
Restaking & Infra Day (Bangkok, 12 Nov)
Restaking & Infra Day is a full day of keynotes, workshops and panel discussions about recent advancements in the restaking field:
- Liquid restaking and staking;
- Oracles and other AVSs;
- ZK Coprocessors and Layer 2 solutions;
- Restaking on BTC, Cosmos and other chains;
- Security and risks of restaking.
What to expect:
- 15+ speakers
- 250+ attendees
- Excellent networking opportunities
Blockhead readers can get 20 free tickets with the coupon code BLOCKHEADLOVE. You can use them after choosing the "guaranteed seat" option, in the "Add a coupon" field.
Be the first one to grab a free ticket: https://t.ly/ZP-pE
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