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BITCOIN surpassed US$67,000 for the first time in more than a month, reviving speculation that the largest cryptocurrency may soon make another run at record highs, amid optimism that a second Trump presidency will be beneficial for digital assets.
The surge of almost 6 per cent to US$67,434 on Friday (Jul 19) by the crypto market’s bellwether helped to lift the fortunes of smaller tokens such as Solana, Dogecoin and Avalanche, which were all up more than 3 per cent. Bitcoin reached an all-time high of almost US$74,000 in March amid optimism over demand for US exchange-traded funds that had been allowed to hold the token directly for the first time.
The increased likelihood of Republican nominee Donald Trump becoming president is driving Bitcoin and the rest of the cryptocurrency market higher, according to FRNT Financial chief executive officer Stephane Ouellette. That is because, if elected again, a second Trump administration would create a much more favourable regulatory environment for the crypto industry, he said.
“We’re on the precipice of another bull market cycle, similar to 2021,” said Ouellette. Bitcoin reached its previous all-time high in late 2021.
Crypto is rallying even as stocks are falling, eroding the sector’s recent correlation with other so-called risk assets. Most groups in the S&P 500 dropped Friday, with the gauge having its worst week since April.
In the days following a failed assassination attempt against Trump, the odds of him becoming president have risen to around 63 per cent, according to PredictIt, an election prediction market. In about the same time, the price of Bitcoin has jumped around 15 per cent.
JD Vance being selected as the Republican vice presidential candidate is also a tailwind for crypto, according to Ouellette. Vance’s ties to Silicon Valley and pro-crypto views will favourably impact policy if the Republicans win back the White House in November from President Joe Biden, he said.
“While there is a premium for options that have election exposure, it is relatively muted since Trump is currently the runaway favourite to win,” said FalconX head of markets Ravi Doshi. “That could of course change drastically if Biden drops out of the race.”
FalconX’s derivatives desk has seen largely bullish longer dated flows through the end of the year, Doshi said. BLOOMBERG
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