Bitcoin has surged past $71,000 for the first time since June, driven by investments in dedicated exchange-traded funds and speculation surrounding the upcoming US election. As of 10:45 AM Tuesday in Singapore, Bitcoin traded at $71,310, marking an increase of over 2%. Both Ether and Dogecoin, popular among meme investors, also saw gains of about 4%.
Many view Bitcoin as a potential “Trump trade” due to Republican presidential nominee Donald Trump’s support for digital assets during his campaign. He currently leads in prediction markets, while polls indicate a tight race against Democratic candidate Vice President Kamala Harris.
The cryptocurrency’s rise has been supported by an overnight rally in stocks and is seen as reflecting expectations of a Trump election victory, according to Tony Sycamore, a market analyst at IG Australia Pty. He noted that Bitcoin must maintain a price above $70,000 to build confidence in surpassing its March record of $73,798.
Trump has promised to position the US as the global hub for cryptocurrencies, while Harris has proposed a more cautious approach, advocating for a regulatory framework. This stands in contrast to the more stringent measures taken during President Joe Biden’s administration.
In addition, Trump has suggested that billionaire Elon Musk, a significant campaign donor, could lead an initiative aimed at reducing government spending, referred to as the Department of Government Efficiency, or DOGE, referencing Dogecoin.
Options traders are betting on Bitcoin reaching $80,000 by the end of November, regardless of the election outcome. Implied volatility is heightened around Election Day on November 5. Spot-Bitcoin ETFs in the US have garnered approximately $3.3 billion in net inflows this month.
So far in 2024, Bitcoin has increased by 70%, managing to withstand reduced expectations for Federal Reserve interest rate cuts and recent scrutiny of Tether, a key stablecoin in cryptocurrency trading.
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