The price of Bitcoin has soared since Donald Trump won re-election on Nov. 5.
Its price rose from roughly $73,000 on Election Day to an all-time high of over $98,000 early Thursday morning, according to CoinGecko data. It’s gone up nearly 8% in the past week, over 41% in the past month, and up 141% in the past year.
Cryptocurrency prices are notoriously volatile. But the larger a coin’s market cap, the more money it takes to spike or dump its price. Bitcoin is the largest cryptocurrency by market cap and the oldest, and its price movements can influence the rest of the crypto market.
Donald Trump at the Bitcoin 2024 conference (Credit: Brett Carlsen/Bloomberg via Getty Images)
David Duong, head of institutional research at Coinbase, tells PCMag via email that Bitcoin surpassing $90,000 is due to a combination of a favorable broader market and US government changes (like Trump) that may trigger “a potentially massive shift.”
“The US approval of spot BTC and ETH ETFs were the major milestones, of course. But also, the implementation of Europe’s MiCA regulation, the House approval of FIT21 in May, and BlackRock’s tokenized BUIDL fund were all significant developments. These advancements were particularly impressive considering that only a year ago, the asset class was reeling from interest rate hikes and regulatory crackdowns,” Huong says.
The crypto industry has been accused of “buying” or winning the election for Trump. Coinbase spent over $50 million on political donations this election cycle, and its CEO, who openly supports Trump, reportedly met with the President-elect this week.
James Slusser, head ambassador for the Polkadot blockchain and founder of crypto consulting firm Kurkuma, tells PCMag that the current Bitcoin price spike is happening because investors feel more confident because of Trump and the approval of Bitcoin ETFs. They now believe US regulation will favor them.
“Bitcoin’s price is shaped by a dynamic interplay of factors, including market sentiment, regulatory developments, and broader macroeconomic conditions,” Slusser says, adding: “While the current momentum appears promising, the cryptocurrency market remains inherently volatile, with prices subject to rapid fluctuations.”
Slusser urges investors to “approach the market with caution, keeping a close eye on evolving trends and maintaining a well-considered strategy to navigate this high-risk, high-reward environment.”
Trump has embraced the broader crypto industry in the past few years, from launching his own NFTs to appearing at this year’s Bitcoin Conference and making friends with crypto supporters like Tesla CEO Elon Musk, who has been tapped to run a “Department of Government Efficiency,” or DOGE. This acronym is also the name of the meme coin Musk once touted on Saturday Night Live in 2021 before the crypto market crashed in large part due to the failure of now-jailed Sam Bankman-Fried’s FTX exchange months later.
Damian Williams, US attorney for the Southern District of New York, announces the indictment of Samuel Bankman-Fried in 2022. (Photo by Stephanie Keith/Getty Images)
Trump has also made a lot of crypto promises. In July, he said that the US government would supposedly never sell off any of its current Bitcoin holdings, which it has obtained over the years by seizing it from cybercriminals. Hackers and scammers often prefer using crypto and targeting crypto users because blockchain transactions can’t be reversed, and identities can be difficult to trace if certain platforms or anonymizing mixing services are used.
“When new inflows come in to crypto, the most obvious place for them to go is BTC,” says Chris Akhavan, chief revenue officer at crypto platform Magic Eden. “This cycle is likely to even be more skewed towards BTC given some of the tailwinds like speculation that the US will build up a BTC reserve.”
Trump also said he would fire US Securities and Exchange Commission Chairman Gary Gensler, a known crypto critic. A president does not have the power to fire the SEC chair, but Gensler on Thursday beat Trump to the punch and announced he would resign come January.
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Trump also supports Bitcoin mining and wants the rest of it to be done in America, claiming back in June that “Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left.” The Biden administration has not stated its crypto stance outright, but Axios suggested earlier this month that Biden’s polices overall are designed to hinder crypto’s advancement.
Rival Coins Limp Along
While Bitcoin has surpassed its previous all-time highs, its second-largest rival, Ethereum, has not. It’s still down about 30% from an all-time high achieved in 2021. Huong says this is because of a changing narrative around Ethereum’s purpose, while JP Richardson, co-founder and CEO of crypto wallet firm Exodus, argues it hasn’t made as many gains as Bitcoin because the Ethereum investors and developers are focused on infrastructure.
“The industry overall is more mature than ever—especially from a user experience perspective,” Richardson says, referring to the growing number of crypto wallets and other tools like token marketplaces available these days.
A big remaining challenge for the crypto industry, however, will be to get more everyday people to see the utility in the currencies beyond being a potential investment vehicle, risky gamble, or outright scam. And, of course, it’s always possible Trump may not keep all his crypto promises. A sudden “black swan” event, whether within or outside of the crypto industry, could also destabilize prices and send them downward.
Bitcoin and crypto have also faced more than their fair share of controversies, from environmental concerns over Bitcoin’s energy use to a deluge of crypto scams, the FTX and Terra Luna crashes, and North Korean hackers swiping over $2 billion in crypto through various attacks.
Soaring prices don’t mean you should dump all your savings into Bitcoin, though. “If someone is not already in crypto, I would not be recommending that they ape in a bunch of money right now all at once,” Akhavan says. “I wouldn’t give specific financial advice to anyone, but would say it’s better to commit to your own consistent strategy by doing your own research and forming your own plan.”
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About Kate Irwin
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