Bitcoin Breaks Record as Election Bets Lift Crypto Market Value Above Pandemic Peak

The largest token has jumped about 32% since the US election on Nov 5, hitting an all-time high of $89,599 on Tuesday.

Bitcoin hit a record high on Tuesday, continuing its rally as traders bet on a boom in cryptocurrencies under President-elect Donald Trump.

Bitcoin rose to as high as $89,599 on Tuesday, hitting a new all-time high. The largest token has jumped about 32% since the US election on Nov 5.

Trump has vowed friendlier crypto rules and his Republican Party is set to expand its grip on Congress, boosting his odds of pushing through his agenda.

His other pledges include setting up a strategic bitcoin stockpile and fostering domestic mining of the token to make the US the crypto capital of the planet.

His stance is a sharp break from a US Securities and Exchange Commission crackdown on the divisive industry under President Joe Biden.

The change of tone has energised speculative buying of large and small tokens alike, raising the value of digital assets overall to about $3.1 trillion, CoinGecko data show.

Bitcoin is in “beast mode”, said Chris Weston, head of research at Pepperstone Group.

“The question for traders not already set is whether there is still room to chase this red-hot play or wait for a slight retracement and for some of the heat to come out of the impulsive trend.”

Investors are lining up bets in the options market that bitcoin will pass $100,000 as soon at the end of the year, Deribit exchange data show.

Open interest — or outstanding contracts — for CME Group futures for bitcoin and second-ranked Ether scaled records on Monday, a sign of growing engagement by US institutional investors.

Meanwhile, software firm MicroStrategy Inc — the largest publicly traded corporate holder of bitcoin outside the exchange-traded fund (ETF) sector — bought about 27,200 bitcoin for about $2 billion between Oct 31 and Nov 10.

Traders for now are paying little heed to questions such as how quickly Trump will implement his agenda or whether a strategic stockpile is a realistic step.

The febrile mood is illustrated by a recent doubling in the price of Dogecoin, a meme-crowd favourite promoted by Elon Musk, the billionaire who is one of Trump’s biggest cheerleaders.

Bitcoin is up roughly 110% in 2024, helped by robust demand for dedicated US ETFs and interest-rate cuts by the Federal Reserve.

The token’s rise exceeds the returns from the likes of global stocks and gold. Turnover in BlackRock’s $39-billion iShares bitcoin Trust reached an all-time high on Monday.

Fairlead Strategies technical analyst Katie Stockton said “it would be natural to see a period of digestion after such a steep run-up” in bitcoin, recommending a “short-term neutral bias”.

Digital-asset companies spent heavily during the US election campaign to boost candidates viewed as favourable to their interests.

Against that backdrop, Trump did an about-face, becoming a supporter of an industry he once labeled a scam.

His backing turned bitcoin into one of a range of so-called Trump trades. Others include US stocks and the dollar, both of which have also been advancing given Trump’s focus on domestic economic growth, tax cuts and protectionist tariffs.