Update:
Updated at 9:53 a.m., Nov. 6, to reflect details of bitcoin surge.
Trump win ignites crypto frenzy that sends bitcoin to a record high
Bitcoin jumped nearly 8% in early trading, climbing above $75,000 and smashing its previous record set in March.
LONDON — The price of bitcoin hit a new high Wednesday and crypto-related shares rallied 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.
Crypto-related shares outran the rest of the stock market. Coinbase, one of the biggest cryptocurrency exchanges, leaped 17%. Online brokerage Robinhood Markets, which offers crypto trading, soared 12% and MicroStrategy, which says it is the “largest corporate holder of bitcoin,” jumped 10%.
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.”
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 Coinbase CEO Brian Armstrong . “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.”
Ahead of U.S. markets opening Wednesday, the future for the S&P 500 gained 1.23% and the future for the Dow Jones Industrial Average was up 1.02%. The Nasdaq composite future was 1.43% higher.
Bond yields also surged, with the yield on the 10-year Treasury climbing to 4.4% from 4.28% on Tuesday.
“The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook,” Peter Esho of Esho Capital said in a commentary.
In early European trading, Germany’s DAX climbed 1.3% to 19,503.40, while the CAC 40 in Paris advanced 1.9% to 7,550.36. Britain’s FTSE 100 was up 1.4% at 8,285.06.
Markets worldwide have been fixated on what the election will mean for U.S. economic, monetary and trade policy, as well as geopolitics. A split in Congress between political parties would complicate policymaking, and a White House headed by Trump could have far-reaching ramifications given his support for sharp increases in tariffs, especially on imports from China.
The dollar surged against both the Mexican peso and the Chinese yuan, two key trading partners expected to be significantly affected by tariff increases. It was also up against the yen and the euro.
The broad U.S. stock market has historically tended to rise regardless of which party wins the White House, even if each party’s policies can help and hurt different industries’ profits.
Since 1945, the S&P 500 has risen in 73% of the years where a Democrat was president and 70% of the years when a Republican was the nation’s chief executive, according to Sam Stovall, chief investment strategist at CFRA.
The S&P 500 has risen nearly 70% since the 2020 election brought President Joe Biden into office. It rallied to records as the U.S. economy bounced back from the COVID-19 pandemic and managed to avoid a recession despite a jump in inflation.
The economy was a key issue for inflation-weary U.S. voters who chose Trump this time around, though mainstream economists have said Trump’s policy proposals would make inflation worse.
Trump has also vowed to sharply raise tariffs on imports from China and other countries, darkening the outlook for Chinese exporters at a time when Beijing has relied heavily on ramping up manufacturing to try to revive its slowing economy.
“Positive outcomes for Harris are expected to boost Asian assets, while Trump gains may exert downward pressure,” Anderson Alves of ActivTrades said in a commentary.
Chinese markets have been among the most active in the region this week as leaders hold a meeting of the Standing Committee of the National People’s Congress, the country’s legislature.
The gathering is expected to deliver more moves to help spur faster economic growth and resolve mounting levels of local government debt. On Tuesday, upbeat comments by Premier Li Qiang about the potential for both fiscal and monetary policies helped lift share benchmarks in Hong Kong and Shanghai by more than 2%. Li also expressed confidence that China will attain its growth target of about 5% this year.
In Asian share trading Wednesday, Japan’s Nikkei 225 index gained 2.6% to 39,480.67, while the Kospi in Seoul shed 0.9% to 2,553.90.
Australia’s S&P/ASX 200 rose 0.8% to 8,199.50.
Hong Kong’s Hang Seng index fell 2.2% to 20,538.38, ending a three-day rally, as investors sought safe-haven assets amid the uncertainties surrounding the U.S. election. The Hang Seng Tech Index slipped 2.5%, while the Shanghai Composite index edged 0.1% lower, to 3,383.81.
In other dealings early Wednesday, U.S. benchmark crude oil lost 90 cents to $71.09 per barrel. Brent crude, the international standard, gave up $1.00 cents to $74.53 per barrel.
By ZIMO ZHONG, ELAINE KURTENBACH and KELVIN CHAN with The Associated Press
