LONDON: Bitcoin soared to a record high above $82,000 on Monday on expectations that cryptocurrencies will boom in a favourable regulatory environment following the election of Donald Trump as U.S. president and of pro-crypto candidates to Congress.
The world’s biggest and best-known cryptocurrency , has now more than doubled from the year’s low of $38,505 and was last at $81,991, having earlier touched a record high of $82,413.
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.
“Bitcoin’s Trump-pump is alive and well… with Republicans on the cusp of taking the house to confirm a red wave in Congress, it seems the crypto crowd are betting on digital-currency deregulation,” said Matt Simpson, senior market analyst at City Index, referring to Republican control of both houses.
While Simpson warned that Trump’s near-term priorities are likely to lie elsewhere, crypto investors see an end to stepped-up scrutiny under U.S. Securities and Exchange Commission Chair Gary Gensler whom Trump has said he will fire.
The cryptocurrency industry spent more than $119 million backing pro-crypto congressional candidates, many of whom won their races.
In Ohio, one of the crypto industry’s biggest foes in Congress – Senate Banking Committee Chair Sherrod Brown – was ousted, while pro-crypto candidates from both the Democratic and Republican parties won in Michigan, West Virginia, Indiana, Alabama and North Carolina.
Trump also unveiled a new crypto business, World Liberty Financial, in September. Although details about the business have been scarce, investors have taken his personal interest in the sector as a friendly signal.
Billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
Bitcoin hits $80,000 for the first time
Eric Trump, one of the president-elect’s sons and executive vice president of his private conglomerate, The Trump Organization, is a keynote speaker at a bitcoin conference in Abu Dhabi next month, according to the event organisers.
“The incoming Trump administration may lead to expedited regulatory clarity, enhanced institutional participation, improved market infrastructure, and broader mainstream adoption,” Deutsche Bank research analyst Marion Laboure said.
“Trump’s pragmatic approach marks a clear departure from recent regulatory restrictions.”
Flows into cryptocurrency exchange-traded funds (ETFs) have also picked up since Trump’s election win.
On Thursday, Nov. 7, bitcoin ETFs experienced their largest inflows on record, drawing a net $1.38 billion, according to data from Citigroup.
“There have been significant inflows across the board,” Citi analysts said in a note.
“ETF inflows have been the dominant driver of Bitcoin returns, and we expect this to continue in the near-term,” they added.
Gains in cryptocurrencies have been broad. Ether rose above $3,200 for the first time in over three months over the weekend and was last fetching $3,188. Dogecoin, an alternative cryptocurrency that began as a satirical critique of the 2013 crypto frenzy, was at a three-year high.
Deutsche Bank’s Laboure also expects rate cuts from the Federal Reserve to create a supportive environment for the cryptocurrency market.
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