Bitcoin surges past $75,000 as Trump takes early election lead

As US election results started rolling in, Bitcoin surged to a new record, breaking $75,000 at 3:08 UTC and signaling strong investor sentiment tied to Republican candidate Donald Trump’s crypto-friendly platform.

The cryptocurrency, already up by more than 8% on election night, has drawn intense interest from traders watching the tight race between Trump and Vice President Kamala Harris.

Trump’s platform includes policies supportive of the digital asset industry, a stark contrast to the regulatory scrutiny experienced under the Biden administration.

Bitcoin rallies amid tight election results

Bitcoin’s price increase was fueled by Trump’s early lead in critical states such as Georgia and North Carolina.

While the final results remain uncertain, traders are betting that a Trump victory could usher in favourable policies for cryptocurrency.

According to Fredrick Collins, CEO of VeloData,

Bitcoin is one of the top instruments for trading the election tonight. It’s relatively liquid and very tied to the outcome. Any increase in price reflects Trump’s prospects of winning.

Other digital currencies also rallied as election updates unfolded, with Ethereum rising by 6.5% and Dogecoin seeing an 18% boost, largely due to its association with Trump supporter Elon Musk.

Cosmo Jiang, general partner at Pantera Capital, commented, “Doge, because of its association with Musk, has been a particular beneficiary.”

Crypto-backed campaign finance pushes digital assets into the political spotlight

This election has spotlighted cryptocurrency in mainstream political discourse, with both candidates outlining differing views on digital assets.

Trump staked out a pro-crypto stance, proposing policies to make the US the world’s “crypto capital” and pledging to establish a national Bitcoin reserve if elected.

Harris, by contrast, has taken a more cautious approach, advocating for clearer regulations and a structured framework for the industry, rather than the heavy enforcement seen under the current administration.

Industry experts say a Trump win could give crypto a more substantial foothold in US economic policy. His platform could bring favorable tax treatments and encourage innovation in decentralized finance.

Harris, however, supports creating a clearer regulatory environment, appealing to companies seeking legal clarity for digital assets.

Market volatility spikes in response to election uncertainty

With the election outcome uncertain, traders have braced for volatility in the crypto market.

Bitcoin’s 30-day implied volatility index spiked to its highest level since July, with options markets pricing in an 8% swing in either direction following the election—a sharp rise compared to typical market fluctuations.

Caroline Mauron, co-founder of crypto liquidity provider Orbit Markets, explained,

The options market was signaling moves of about 8% after the vote, much higher than a typical day. This volatility reflects investors’ uncertainty over the election outcome.

On Monday, investors pulled $579.5 million from Bitcoin ETFs, the largest one-day outflow on record, according to Bloomberg data, indicating nervousness in the lead-up to the election.

Despite the temporary outflows, Bitcoin has risen more than 70% in 2024, significantly outperforming traditional assets like stocks and gold.

Bitcoin’s performance boosted by ETF inflows and market shifts

Bitcoin’s impressive performance this year owes much to strong inflows into newly launched Bitcoin ETFs from major financial players such as BlackRock and Fidelity.

Bloomberg data shows net inflows into these funds totaling $23.6 billion, with investors drawn to the convenience and perceived stability of Bitcoin ETFs.

The SEC’s grudging approval of Bitcoin ETFs in 2023, following a court mandate, was a major milestone for the industry, making digital assets more accessible to traditional investors.

However, regulatory uncertainties have kept some institutional players cautious, awaiting more definitive guidance on compliance and reporting.

Crypto industry eyes policy shifts as election unfolds

Executives in the cryptocurrency sector have expressed optimism that either candidate’s policies could be an improvement over the Biden administration’s enforcement-heavy approach.

Under President Biden, crypto firms have faced regulatory actions from the SEC, which has launched multiple enforcement cases and accused the industry of being rife with misconduct.

SEC Chair Gary Gensler, a vocal critic of digital assets, has argued that the industry is plagued by fraud, citing events like the FTX collapse in 2022 as evidence of its instability.

However, Trump’s proposed policies have raised hopes for a regulatory shift that might promote innovation while maintaining investor protections.

High stakes in both crypto and political markets

The final outcome of the 2024 election will have lasting effects on both US policy and the crypto market.

A Trump win could see a more supportive environment for digital assets, while a Harris administration may emphasize structured regulatory frameworks.

With Bitcoin surging to record highs, the financial world is closely watching the election, as investors and the crypto community alike brace for further developments.

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