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Bitcoin hit a record high ahead of Donald Trump’s victory in the US presidential election.
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Trump’s support for digital assets is boosting investor confidence in other cryptocurrencies too.
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Investors were leaning into the “Trump trade” early Wednesday.
Bitcoin surged past $75,000 for the first time hours before Donald Trump won the US presidential election.
The Republican candidate’s lead in the race fueled the so-called Trump trade as investors bet on assets expected to benefit from a second term for the former president.
One of the winning bets was cryptocurrencies. Trump has supported digital assets in recent years, and Yeap Jun Rong, a market strategist at IG, wrote on election night that the politician’s pro-crypto stance was driving bitcoin‘s gains.
Bitcoin retreated from its record high but was still up almost 7% at about $74,425 as of 7:50 a.m. ET Wednesday.
Kyle Rodda, a senior market analyst at Capital.com, described other bullish signs for bitcoin, writing in a note that a Trump presidency was also associated with tax cuts, steeper tariffs, a deeper deficit, a higher debt levels, more Treasury issuance, and higher inflation.
Other cryptos also gained, including ethereum — up about 9% — and meme coins such as dogecoin, up 15%. Trump, who in 2021 called bitcoin a “scam,” owned over $1 million in ethereum, his financial disclosure this summer showed.
Trump and Elon Musk have publicly discussed the Tesla CEO leading a new Department of Government Efficiency or DOGE, a nod to the dog-themed coin.
Bitcoin and other coins are seen as alternatives to the dollar and hedges against inflation and depreciation. The dollar still gained against other major currencies in early trading Wednesday as investors wagered that Trump’s policies would fuel inflation, constraining the Federal Reserve’s ability to cut interest rates.
“The greater inflationary risks and higher levels of debt also support assets like gold and bitcoin, which investors buy to hedge themselves against such trends,” Rodda wrote.
The crypto industry has been at odds with President Joe Biden’s administration over regulations, although bitcoin has surged more than 100% during his term.
Crypto investors expected a friendlier environment under Trump or Vice President Kamala Harris, the Democratic candidate, who has also embraced crypto.
“With Trump’s return to the White House, bitcoin has found renewed momentum, hitting record highs and possibly poised for more gains in the coming months,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said in a note.
