PHILADELPHIA (AP/ KYW Newsradio) — The price of bitcoin hit a new high Wednesday as investors bet that former President Donald Trump’s victory in the U.S. presidential election will be a boon for cryptocurrencies.
Bitcoin jumped nearly 8% in early trading, climbing above $75,000 and smashing its previous record set in March. Other cryptocurrencies also soared, including ether, the world’s second most popular cryptocurrency after bitcoin, which rallied 8%.
Another token, dogecoin, rocketed as much as 18%. It’s the favorite cryptocurrency of billionaire Elon Musk, one of Trump’s most prominent supporters. Shares of Tesla, led by Musk, also jumped.
Trump was previously a crypto skeptic but changed his mind and embraced cryptocurrencies ahead of the election.
He has pledged to make America the “crypto capital of the planet” and create a “strategic reserve” of bitcoin. His campaign accepted donations in cryptocurrency and he courted crypto fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.
Bitcoin is up 77% this year.
“Bitcoin is the one asset that was always going to soar if Trump returned to the White House,” said Russ Mould, investment director at AJ Bell, a British online investment platform. After touching its new high, the market is now speculating about “when, not if, it will smash through $100,000,” he said.
“Trump has already declared his love of the digital currency and crypto traders now have a new narrative by which to get even more excited about where the price could go,” Mould said.
But other experts warned of the risks.
“Investors should only dabble in crypto with money that they can be prepared to lose,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Because we’ve seen these wild swings in the past.”
Mark Hamrick, senior economic analyst for Bankrate, said investors may feel confident with Trump in the White House, but ultimately, a president doesn’t have the power to bring prices down.
Prices of everyday items are higher because of pandemic-era supply chain backups and ripple effects from the war in Ukraine, he said.
“A president can do harm but there’s not a lot they can do to bring inflation down,” he explained. “That is essentially the mission of the Federal Reserve, and respecting Federal Reserve independence would be consistent with trying to bring inflation down.”
According to Hamrick, investors expect interest rates to fall again on Thursday.
“The No. 1 issue for the markets this week beyond the election is the Federal Reserve meeting, and the Fed is expected to cut interest rates by one-quarter of 1% — and that’s a positive for stocks,” he added.
Crypto regulations
Crypto industry players welcomed Trump’s victory, in hopes that he would be able to push through legislative and regulatory changes that they’ve long lobbied for.
Trump had already promised that, if elected, he would remove the chair of the Securities and Exchange Commission, Gary Gensler, who has been leading the U.S. government’s crackdown on the crypto industry.
“Tonight the crypto voter has spoken decisively — across party lines and in key races across the country,” said Brian Armstrong, CEO of Coinbase, one of the biggest cryptocurrency exchanges. “Americans disproportionately care about crypto and want clear rules of the road for digital assets. We look forward to working with the new Congress to deliver it,” Armstrong posted on X.
Streeter said Trump’s administration would most likely pursue “light touch regulation” for the crypto industry.
“Certainly that’s what crypto fans would want,” she said. “They want the sheen of legitimacy to be brought to crypto, but they don’t want regulations to be too onerous to stop opportunities and innovation.”