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Bitcoin rallied overnight, hitting an all-time high as investors bet former President Donald Trump gained an edge in the US election as a result of the rollback.
The price of the flagship cryptocurrency touched a record $75,000 on the nose, according to Coin Metrics. It ended higher by 7% at $74,392.00. It first hit a previous record high of $73,797.68 on March 14 and has traded in a narrow range below $70,000 for most of the year since then.
Bitcoin’s overnight gains surged as Trump took an early lead in the Electoral College. NBC News reports that Trump has won 230 electoral college votes, including the state of North Carolina.
exchange operator Coinbase rose 3% in after hours trading, when MicroStrategyadvance 4%.
Investors expect bitcoin trading to be volatile until a clear winner is announced. A victory for Vice President Kamala Harris is expected to bring the risk of downside movements for the price of bitcoin, while traders anticipate a bump in the price in the event of a win by former President Donald Trump.
Bitcoin rose above $71,000 on election night
“Elections have a big impact on crypto,” said Ryan Rasmussen, head of research at Bitwise Asset Management. “Expect bitcoin – and crypto more broadly – to be volatile in the coming days… until we have definitive election results.”
“If Trump wins, I believe we will see the top,” Rasmussen added. “If Harris wins, I expect a decent short-term sell-off, with prices taking one or two months to recover. But in the end, either way, I think we’ll go up more.”
In the 2012, 2016 and 2020 elections, bitcoin returned approximately 87%, 44% and 145% in the 90 days after the election day. That’s partly because election years fall on Bitcoin half-years, when the cryptocurrency’s supply drops. Post-election returns also tend to be in line with Federal Reserve policy changes. This year, the market expects further interest rate cuts.
Below $70,000, bitcoin has been trading at a fair value on election day, according to CryptoQuant. That means that if the election proves to be a positive catalyst in the coming days, bitcoin could rally and be ready to set a new record, CryptoQuant analyst Julio Moreno said.
“Right now, everyone we’ve talked to is staying dry,” said James Davies, CEO of crypto futures and options trading platform Crypto Valley Exchange. “I’ve heard from a lot of market makers and traders and I can say with confidence that almost everyone is ready for a reaction. They don’t know how the market will do based on (the) results. – term volatility whatever the results.”
This year’s presidential election is said to be the most important in the lifetime of the crypto industry. Many see Harris’ victory as a threat to crypto, which has been discussed in this election cycle. Trump, on the other hand, is seen by many as a force for good in the industry after he presented himself earlier this year as a pro-crypto candidate and has been courting the industry more directly than Harris has.
Many voters are concerned about the government deficit, which is expected to rise 8% in fiscal year 2024 to $1.8 trillion, and the increased tax cuts promised by both candidates. Bitcoin, like gold, is seen by many investors as a hedge against the potential for fiscal and monetary policies that combine to reduce the value of the dollar and lift inflation.
