Election optimism pushes bitcoin near new high as investors ‘vote with their buy orders’
Bitcoin (BTC-USD) is once again flirting with an all-time high as investors bet on a boost from the outcome of the presidential election.
The price of the world’s largest cryptocurrency rose to $73,577 Tuesday, putting it within reach of its previous high of $73,750, as measured by Yahoo Finance data, set on March 13 of this year. It is currently trading below $73,000.
Bitcoin is up more than 9% over the last five days. Year to date, its price has climbed over 72%.
The two biggest factors driving the blistering rally are seasonality (the second half of October is usually bitcoin’s best-performing period) and the US election, according to Sean Farrell, a digital asset strategist with Fundstrat.
Investors are “voting with their buy orders,” Farrell told Yahoo Finance.
Much is riding on a victory by Republican presidential candidate Donald Trump, who made a number of promises to the industry back in July.
Republican presidential nominee former President Donald Trump speaks at the Bitcoin 2024 Conference last July, in Nashville. (AP Photo/Mark Humphrey, File) ·ASSOCIATED PRESS
He promised to appoint a crypto presidential advisory council; fire Securities and Exchange Commission Chair Gary Gensler, one of the industry’s greatest antagonists; and establish a “strategic national bitcoin stockpile” with the help of Congress.
The Democratic nominee, Kamala Harris, has promised to create a regulatory framework for cryptocurrency and other digital assets as part of an outreach to Black men. Roughly 20% of Black Americans are estimated to own or have owned digital assets.
“There’s no doubt that if Trump were to win the White House, it would be enormously constructive for digital assets,” said Funstrat’s Farrell. “If Harris were to win, I do think we would see a pretty strong wick lower initially,” he added.
The difference “between a Harris win and a Trump win would be significant,” added Ian Katz, a managing director at Capital Alpha Partners.
Democratic presidential nominee Vice President Kamala Harris reacts before speaking during a campaign event at the Ellipse near the White House in Washington, on Tuesday. (AP Photo/Jacquelyn Martin) ·ASSOCIATED PRESS
Many in the industry expect a more favorable regulatory regime in store for crypto in 2025, regardless of who wins.
“It is a Trump premium as opposed to Harris discount, and a big reason for that is the Senate is likely to shift red,” Fundstrat’s Farrell added.
“The most important thing for bitcoin is that the election happens,” Bitwise Asset Management chief investment officer Matt Hougan told Yahoo Finance Live. “I think we’re going above $100,000.”
Crypto corporations have poured $160 million into federal elections to elect more industry-friendly politicians as of Oct. 22, according to a Politico report.
And the industry’s largest exchange, Coinbase Global (COIN), is also one of its largest political donors through nonpartisan super PAC, Fairshake.
The company has a lot riding on the outcome of the election. For one, it is facing an expensive legal battle with the SEC over whether some of the cryptocurrencies that trade on its platform are securities.
Such a case “could disappear under a Republican SEC chair,” Katz said.
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler. REUTERS/Mike Segar/File Photo ·Reuters / Reuters
Coinbase said Thursday that it is prepared to work with either administration after Election Day and believes the odds of pro-crypto legislation are greater than ever.
“We see both presidential candidates now and politicians up and down the ballot courting crypto,” Coinbase CFO Alesia Haas told Yahoo Finance.
“We feel really good about going into the next administration, that we are entering a new phase of crypto legislation, and we’re really excited.”
Coinbase reported its fourth consecutive quarterly profit Wednesday but its net total revenue fell 18% from the previous quarter with crypto prices largely staying range bound and its subscription and services revenue also falling 7% for the same period.
Its stock fell 3% following its third quarter earnings release.
Meanwhile, the world’s largest corporate holder of bitcoin, MicroStrategy (MSTR), announced a new strategic capital ambition to raise $42 billion over the next three years to buy more bitcoin. It also took a $412 million impairment on its bitcoin holdings. As of September, 30, the company held a total of 252,200 bitcoins, acquired for an aggregate cost of $9.9 billion.
Its stock fell 4% as investors digested the announcement.
“We plan to use the additional capital to buy more bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield,” MicroStrategy CEO Phong Le said in the firm’s third quarter release.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
