• Bitcoin’s value rose as betting markets indicated an increased chance of Donald Trump winning the upcoming US presidential election
• Investors expect a Trump presidency to create a more favorable regulatory climate for the cryptocurrency industry
• Trump has positioned himself as the crypto-friendly candidate and is due to speak at a major bitcoin conference later this month
The value of bitcoin hit a two-week high on Monday as betting markets suggested an increased chance of victory for crypto-friendly candidate Donald Trump in the upcoming US presidential election. The rally follows the dramatic assassination attempt on the former president over the weekend.
Trump’s Favorability Rises
Analysts say Trump’s favorability will likely increase after the assassination attempt, much like President Reagan’s popularity rose after he was shot in 1981. Even though it’s not an election year, the strong economy means Trump’s popularity could have a positive impact on markets.
Expected Boost for “Trump Victory Trades”
Investors said over the weekend they expected so-called “Trump victory trades” to receive a boost. Those trades include various crypto stocks such as Coinbase and Riot Platforms, which were up sharply in premarket trading Monday morning.
Bitcoin Price Rises
Bitcoin’s price increased by about 9% over the weekend, which could signal that investors expect a Trump presidency would create a more favorable regulatory climate for crypto. Trump has yet to detail any cryptocurrency policies but is seen as broadly supportive of the sector.
Macroeconomic Impacts
In addition, macro policy changes under a second Trump term could introduce risks for the US dollar, including ongoing deficit spending and weaker Fed independence. Any dollar weakness could support bitcoin’s price. Analysts at Standard Chartered said a Trump victory could push bitcoin as high as $150,000 by year-end.
Renewed Confidence for Crypto?
Cryptocurrencies have struggled recently amid a slump in capital inflows. But with a higher probability of a Trump win, analysts see potential for renewed confidence and inflows into crypto and bitcoin.
Conclusion
Bitcoin has rallied on increasing odds of a Trump reelection victory. Investors expect crypto-friendly policies and economic impacts that could boost bitcoin’s price over the medium-term. However, prices remain volatile amid ongoing uncertainty.
