Bitcoin, the world’s largest cryptocurrency, surged to a record-breaking $79,771 on Sunday, marking a 4.3% increase fueled by optimism surrounding the recent U.S. presidential election. President-elect Donald Trump’s pro-crypto promises, combined with a Congress increasingly stacked with digital asset-friendly lawmakers, have sparked excitement across the crypto community and among investors globally. Smaller digital assets, including Cardano and Dogecoin, also saw substantial gains, buoyed by the market’s general exuberance.
Singapore, Bitcoin hovered near $79,000, closing in on the unprecedented milestone of $80,000—a level that underscores the intensifying influence of political developments on the digital asset market. On the campaign trail, Trump’s team frequently emphasized their intention to position the U.S. as a global leader in digital assets. His proposals included creating a strategic Bitcoin reserve for national use, establishing favorable tax policies for crypto transactions, and appointing regulatory leaders supportive of digital currencies. With Trump now headed to the White House, investors and the crypto industry at large are optimistic about the potential for a landmark regulatory overhaul.
“Trump has vowed to bring the U.S. to the forefront of the digital asset space, and we are starting to see the initial impact,” said Le Shi, managing director of Auros in Hong Kong. “It was only a matter of time before this rally began. The perception of Trump as pro-crypto is strong, and the market is responding accordingly.”
Trump’s campaign positioned him as a figure who could bring positive change to the crypto world, starkly contrasting the previous administration’s often adversarial stance toward digital currencies. As such, many investors are now speculating that the favorable political winds will not only encourage broader adoption of digital assets but also spark institutional interest from businesses and government bodies previously deterred by regulatory uncertainty.
The historic rally in Bitcoin prices was underscored by record-setting activity in Bitcoin exchange-traded funds (ETFs). The iShares Bitcoin Trust, managed by investment giant BlackRock Inc., posted a record daily net inflow of nearly $1.4 billion on Thursday, marking an all-time high and reflecting investor enthusiasm following Trump’s victory. The ETF also recorded its highest trading volume to date, according to data compiled by Bloomberg, suggesting that the traditional financial sector may be increasingly interested in digital assets as regulatory support strengthens.
The cryptocurrency industry had previously faced a rocky road under President Joe Biden, whose administration often expressed skepticism and instituted restrictive measures on digital assets. The U.S. Securities and Exchange Commission (SEC) under Gary Gensler took a hardline approach, frequently warning of risks related to fraud and volatility within the sector. However, with Trump signaling a more favorable regulatory stance, many expect a reversal of the restrictive policies of the previous administration.
“Trump’s victory is reshaping the crypto market landscape,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter. “With both the House and Senate leaning in favor of crypto, there is now a stronger likelihood of supportive legislation that could benefit digital assets in the long term.”
With the Republican Party taking control of the Senate and nearing a majority in the House, the prospect of pro-crypto bills passing has increased significantly. Market analysts are speculating that such legislative changes could include tax incentives for crypto investors, streamlined approval processes for blockchain-related projects, and clearer guidelines for digital asset classification, all of which would facilitate easier and more secure entry for businesses and retail investors into the cryptocurrency market.
The potential of federal backing for Bitcoin and other cryptocurrencies has invigorated both U.S. and global investors. While previous efforts at passing crypto-friendly legislation often faced opposition in a divided Congress, a pro-crypto majority is expected to hasten regulatory developments.
“The crypto sector poured funds into campaigns of candidates that were perceived as favorable,” observed industry analyst Caitlin Long, “and those investments seem to be paying off. This administration appears willing to push the U.S. into a more competitive global stance on digital finance, which could have a lasting effect on the entire industry.”
Bitcoin’s journey to its current peak has been marked by significant market gains in 2024, largely due to strong demand for dedicated U.S. ETFs and a series of interest rate cuts by the Federal Reserve. As the most prominent digital asset, Bitcoin outpaced traditional investments such as stocks and gold, becoming one of the highest-performing assets of the year.
So far, Bitcoin has gained over 90% in value this year, making 2024 one of its most significant growth periods since its inception. As both retail and institutional interest continue to rise, Bitcoin’s role as a form of “digital gold” in the investment portfolios of wealthy individuals and funds is becoming more widely accepted. The digital currency’s potential as a hedge against inflation has also been a factor driving the rally, especially as the Fed signals its intent to maintain lower interest rates.
An influx of pro-crypto lawmakers, including Senators and House representatives, has been pivotal in the shifting attitude toward digital assets. During the midterm elections, several high-profile political campaigns received significant backing from digital asset companies and executives. These contributions were intended to create a regulatory environment more supportive of blockchain and cryptocurrency innovation.
“Digital-asset companies and executives understood that policy could make or break the industry in the coming years,” said Kristin Smith, executive director of the Blockchain Association. “The fact that these candidates have been elected signals an important shift in Washington’s perspective on crypto.”
These legislative shifts have created a more favorable landscape for crypto lobbyists, whose primary goal has been to encourage innovation and investment in the United States rather than abroad. With an increasing number of crypto advocates in office, many industry insiders are hopeful that Congress will pass new laws that protect digital asset investors while promoting innovation within the sector.
Trump’s pro-crypto stance marks a sharp departure from the Biden administration’s policies, which were perceived as often hostile to the cryptocurrency industry. During Biden’s tenure, the SEC ramped up its scrutiny of digital asset markets, with SEC Chair Gary Gensler labeling the sector “fraught with risks.” This crackdown was especially pronounced after the collapse of FTX, the crypto exchange run by Sam Bankman-Fried, which led to widespread investor losses.
The Biden administration’s tough stance on crypto regulation culminated in legal actions and tightened scrutiny of crypto exchanges and projects. This approach had a chilling effect on innovation within the U.S., with many firms relocating to countries with more lenient regulations. With Trump’s election victory and the expected arrival of pro-crypto policymakers, the industry is optimistic about the end of what it views as a period of regulatory overreach.
“Trump’s approach to crypto is being viewed as a lifeline by the industry,” commented Sheila Warren, CEO of the Crypto Council for Innovation. “The changes in regulation could reignite growth and restore confidence in the U.S. as a hub for digital asset innovation.”
Despite the optimism, some analysts caution that there are potential risks associated with a loosening of regulations. A less restrictive approach to digital assets could encourage speculative behavior, potentially inflating prices unsustainably and increasing market volatility. Additionally, skeptics argue that lax regulations could lead to issues similar to those seen during the FTX collapse, where inadequate oversight led to significant financial losses for investors.
Furthermore, while Trump’s victory has fueled optimism, the actual implementation of his pro-crypto policies may take time, especially as his administration navigates other economic challenges. Inflation, interest rates, and fiscal policy are expected to take precedence, which could delay the full rollout of crypto-focused initiatives.
The impact of U.S. political dynamics on digital assets is expected to extend far beyond its borders. Bitcoin’s rally has ignited interest in global markets, with investors and policymakers worldwide closely monitoring U.S. developments. As the largest economy in the world, any major regulatory shifts in the U.S. are likely to influence other countries’ approaches to digital asset regulation.
In Asia, for example, countries with established crypto markets, such as Japan and South Korea, are particularly interested in how U.S. policy changes will affect international digital asset flows. Many industry leaders believe that a more welcoming U.S. stance could strengthen Bitcoin’s global role as a reserve asset.
As Bitcoin nears the $80,000 mark, some analysts believe the cryptocurrency could soon cross the psychologically significant $100,000 threshold, provided that supportive legislation and market dynamics continue to favor digital assets. Should Trump’s administration and Congress move quickly to pass pro-crypto policies, it could create a self-sustaining cycle of investment and price appreciation.
Nevertheless, the journey to $100,000 is fraught with potential challenges. Market fluctuations, geopolitical events, and technological developments within the blockchain industry will all play roles in determining Bitcoin’s price trajectory. However, with a pro-crypto administration and supportive Congress now in place, Bitcoin’s path appears to be trending upward.
As the cryptocurrency market continues to develop in the wake of Trump’s victory, the upcoming years could define the future of digital assets in the global financial landscape. For now, investors are poised to see how high Bitcoin can climb as it continues to break new records amid the changing political landscape.
