Bitcoin heads for $90,000 on Trump boost

London/Singapore — Bitcoin rallied to the verge of $90,000 on Tuesday, riding a wave of euphoria since the election of Donald Trump as the next US president on expectations that his administration will be crypto friendly.

The world’s biggest cryptocurrency has become one of the most eye-catching movers in the week since the election and touched $89,982 — a gain of about 30% since November 5. It was last down 1.4% at $86,730.

Bitcoin is surging along with Elon Musk’s vehicle maker Tesla, which is up nearly 40% since voting results rolled in, as investors believe Trump’s friends and interests will do well while he is in office.

“The crypto enthusiasts think they have a like-minded incoming president,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

“The thing about bitcoin ... is that there is no valuation anchor to it, it’s hard to get a grip on fair value. So when sentiment is very positive, it does get carried away a lot more than other asset classes.”

Trump embraced digital assets during his campaign, promising to make the US the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.

It is not clear how or when that could happen but the possibility drove a speculative surge in crypto mining and trading stocks.

“I think it increases the chances that other nation states buy bitcoin in a bid to front-run the US,” said Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital.

“Additionally I think it would be a crazy catalyst for the US listed bitcoin miners ... given the possibilities of such entities getting nationalised.”

Crypto miner Riot Platforms jumped nearly 17% on Wall Street on Monday. Fellow miners MARA Holdings and CleanSpark leapt almost 30%.

Software company and investor in bitcoin MicroStrategy announced it had spent about $2bn buying bitcoin between October 31 and November 10. Its shares rose 26% on Monday.

Trump cryptobusiness

“Obviously [it’s] a clear Trump trade as he is so supportive of the industry, and this can only mean more demand both for crypto stocks as well as the currencies themselves,” Nick Twidale, chief market analyst at ATFX Global in Sydney, said of the bitcoin rally.

“That bitcoin was trading near all-time highs when the election result came through meant that it had clean sky above.”

The euphoria extended across the crypto landscape with smaller tokens such as ether and dogecoin surging, though they dipped on Tuesday morning in Europe.

Crypto investors see an end to increased scrutiny under US Securities and Exchange Commission chair Gary Gensler whom Trump has said he plans to replace. Trump also unveiled a new crypto business, World Liberty Financial, in September.

“What we’re seeing isn’t just a price milestone; it’s a signal that the market is warming to the idea of bitcoin as a more stable, even politically favoured, asset,” said Justin D’Anethan, head of Asia-Pacific business development at digital assets market maker Keyrock.

Reuters