Bitcoin above USD 81,000 – buying pressure increases after Trump victory

The crypto market is booming with new all-time highs. On Sunday, the largest cryptocurrency Bitcoin broke the round mark of 80,000 US dollars for the first time. But the soaring doesn’t seem to be over yet. In the early hours of Monday, BTC price hit a new all-time high of $81,673 as euphoria over the Trump victory continues. After his election victory, the old and new president is not only planning massive Bitcoin purchases as a strategic reserve, but also wants to make the USA a crypto stronghold.

Bitcoin exceeds USD 80,000 for the first time

Bitcoin has surpassed $81,000 for the first time, driven by U.S. President-elect Donald Trump’s positive attitude towards digital assets and the prospect of a Congress with crypto-friendly lawmakers.

Trump was declared the winner in Arizona, giving him a clear victory in the seven battleground states. His landslide victory in the presidential election sent cheers through the crypto market, which spent more than $100 million supporting a number of crypto-friendly candidates.

The largest cryptocurrency climbed as much as 6.1 percent to over $80,000 for the first time on Sunday, before rising further to $81,673 at the start of Asian trading on Monday. The bullish sentiment also boosted smaller altcoins, including a rise in Dogecoin, a memcoin promoted by Trump supporter Elon Musk.

“With the dust yet to settle from Trump’s election victory, it was only a matter of time before there would be a surge as Trump is perceived as a crypto proponent, and that is exactly what we are seeing now,” said Le Shi, Managing Director at Auros, a market maker in Hong Kong.

USA, the new crypto stronghold

During his campaign, Trump promised to make the US a crypto stronghold, including creating a strategic Bitcoin reserve and appointing digital asset regulators. Jubilant traders are currently paying little attention to questions such as the speed of likely implementation or whether a strategic reserve is a realistic option – all that matters is the prospect of a better crypto future.

The broad agenda to boost domestic growth, cut taxes and cut red tape has led to a buying spree in stocks, bonds and cryptocurrencies. The S&P 500 stock index reached its 50th record of the year last week, surpassing the 6,000 point mark for the first time in its history.

ETFs and the Fed

Bitcoin is up around 92 percent year to date, partly due to strong demand for special US exchange-traded ETFs. The US Federal Reserve’s interest rate cuts have also boosted the cryptocurrency. The cryptocurrency’s rise, which hit new record highs after Tuesday’s US election, is significantly outpacing the performance of assets such as stocks and gold.

Exchange-traded ETFs led by BlackRock’s $35 billion iShares Bitcoin Trust saw record inflows of nearly $1.4 billion on Thursday, data compiled by Bloomberg show. A day earlier, iShares ETF trading volume had hit an all-time high, all signs of how Trump’s election victory was reshaping the cryptocurrency.

Trump triggers buying pressure

“We believe a large portion of the institutional market de-risked in the run-up to the election and is now re-entering following Trump’s victory, creating significant buying pressure – which is likely to continue for a while,” says Richard Galvin, founder of the crypto-focused investment firm DACM.

Trump’s stance contrasts with the crackdown on digital assets under President Joe Biden. Securities & Exchange Commission Chairman Gary Gensler has repeatedly described the sector as rife with fraud and misconduct. After a market crisis in 2022 and a series of collapses, most notably the bankruptcy of Sam Bankman-Fried’s fraudulent FTX exchange, the authority has tightened the thumbscrews on cryptocurrencies.

Digital asset companies spent heavily during the election campaign to support candidates seen as serving their interests. Against this backdrop, Trump made an about-face and became a supporter of an industry he once described as a fraud.

“Trump has promised supportive regulation, and his victory in the House and Senate makes passage of crypto legislation much more likely,” wrote Noelle Acheson, author of the newsletter Crypto Is Macro Now.

Angelina Kwan, CEO and founder of advisory firm Stratford Finance, says the rally is a “vindication” and confirmation that digital assets are an asset class for the present and future.

FMW/Bloomberg

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