- Bitcoin surged to a new all-time high of $75,000 on Tuesday evening as traders bet that former President Donald Trump was gaining an edge in the U.S. presidential election
- Crypto assets like Bitcoin are expected to be volatile until a clear winner is declared, with a potential Trump victory seen as bullish and a Harris win seen as bearish for Bitcoin in the short-term
- Bitcoin has historically rallied in the 90 days following U.S. presidential elections, in part due to it being a perceived hedge against inflation and loose monetary policies
Bitcoin hit a new all-time high on Tuesday evening as investors bet that former President Donald Trump was gaining an edge in the U.S. election. The cryptocurrency touched $75,000 amid a rally fueled by the election results.
Bitcoin Jumps Amid Uncertainty Around Election Outcome
The price of bitcoin reached $75,000 on Tuesday, according to Coin Metrics, surpassing its previous record of $73,797 set in March. The gains came as Trump took an early lead in the Electoral College, even though no major swing states had been called yet.
Exchange operator Coinbase and business intelligence firm MicroStrategy, both of which hold significant bitcoin reserves, saw their share prices rise in after-hours trading as bitcoin climbed.
“The election is having a massive influence on crypto,” said Ryan Rasmussen, head of research at Bitwise Asset Management. “Expect bitcoin – and crypto more broadly – to be choppy in the days ahead, until we have definitive election results.”
Traders Brace for Volatility Around Contested Election
Investors are expecting bitcoin trading to remain turbulent until a clear winner is declared in the presidential race. A victory for Vice President Kamala Harris is seen as bringing a risk of downside price moves for bitcoin, while a win by Trump could provide a boost.
This year’s election is considered the most consequential ever for the crypto industry. Trump is largely seen as more crypto-friendly than Harris, courting the industry more directly.
Bitcoin Seen as Inflation Hedge Amid Election Spending
Many investors view bitcoin as a hedge against inflation that could result from expansive fiscal and monetary policies. With the government deficit rising in the latest fiscal year, tax cuts being promised by both candidates, and further Fed interest rate cuts anticipated, bitcoin is seen as a potential store of value if the dollar declines.
At just under $70,000 heading into election day, bitcoin had been trading around its fair value price according to CryptoQuant. That means the cryptocurrency is poised to rally to new highs if the election provides a positive catalyst.
Traders Await Outcome Before Making Big Bets
“I’ve heard from numerous leading market makers and traders and can say with conviction that almost everyone is set up to react,” said James Davies, CEO at crypto derivatives exchange Crypto Valley. “They don’t even know which way markets will go based on the result. There’s likely to be massive short-term volatility whichever outcome.”
