Bitcoin's price has been continuously reaching new highs after Donald Trump was elected President of the United States and announced plans to develop the cryptocurrency market, leading to increased investor enthusiasm.
After soaring to $80,000 per coin on the night of November 10 (Hanoi time), Bitcoin (BTC) set another new record this morning with over $81,858. Since Donald Trump was confirmed as the winning candidate in the race for the White House, BTC has established a new price level every day.
From the price range around $69,000 per coin previously to the peak this morning, the world's largest cryptocurrency has increased by about $12,700, or nearly 18.5%, in less than a week.
Trump's victory is seen as the main driving force behind the new price surge. Forbes believes this is not an unfounded belief as the cryptocurrency industry is the largest 'sponsor' in this year's election. A report from the progressive consumer advocacy group Public Citizen shows that contributions from this sector accounted for 44% of the total funding from business groups as of August. Most of the money was funneled through political action committees (PACs) that specifically support candidates who favor cryptocurrencies.
PACs primarily funded by cryptocurrency companies such as Coinbase and Ripple have collectively spent $135 million to support candidates friendly to the industry in federal races, according to The New York Times. This investment appears to have paid off as of November 10, with 268 cryptocurrency-friendly candidates elected to the House of Representatives and 19 candidates in the Senate, according to the nonprofit Stand With Crypto. This rate is significantly higher than the 122 newly elected House members and 12 senators considered 'anti-cryptocurrency.'
President-elect Donald Trump promised during his campaign to make America the 'cryptocurrency capital of the planet.' Many of his commitments to the cryptocurrency community include launching a national cryptocurrency reserve with over $16 billion of Bitcoin that the U.S. government has accumulated through asset seizures.
Trump's pro-cryptocurrency stance marks a departure from his previous skepticism towards an industry he once called a 'scam.' Trump has repeatedly stated he would 'fire' SEC Chairman Gary Gensler for taking more than 100 legal actions against cryptocurrencies during his tenure, according to CNBC. The newly elected President has also received support from cryptocurrency leaders such as billionaire Marc Andreessen, Cameron Winklevoss, and Tyler Winklevoss. Meanwhile, Vice President-elect JD Vance is a long-time Bitcoin investor.
Trump and his campaign have personally invested in digital currency as Trump's joint fundraising committee began accepting donations through Coinbase in May. He launched his own family cryptocurrency platform, World Liberty Financial, in September.
Donald Trump's victory has also brought about many strong motivations for this market. According to statistics from one of the world's most popular derivative exchanges, Deribit, over $2.8 billion has been wagered on Bitcoin surpassing $90,000, which corresponds to buying call options. Additionally, the CME derivative exchange, which specializes in providing popular BTC futures contracts for institutional investors in the U.S., is betting on Bitcoin's price rising in the future. This creates a very positive crowd psychology foundation that spreads throughout the market.
From a technical perspective, CoinDesk analysts pointed out several reasons why the recent price increase of Bitcoin is justified. They used inflation data from the U.S. Bureau of Labor Statistics to measure how much purchasing power Bitcoin has lost compared to previous years. The results indicate that the current price only increases in line with the rate of depreciation. The record in November 2021 of BTC at around $69,000, after nearly three years, would depreciate to around $78,000. This shows that the current level is only about 4.5% higher than inflation.
In addition, CoinDesk has been monitoring profit-taking in recent weeks. Data from Glassnode shows that on November 6 - a day after the U.S. election, investors took profits of about $3.5 billion, with the amount in the following two days being $3.2 billion.
However, this profit-taking level is very small compared to the period in March when BTC surpassed the 2021 record. At that time, profit-taking surged to $10 billion. During the 2021 price surge, it also recorded profit-taking levels up to $6 billion. The current level of profit-taking is even lower than in 2017, when Bitcoin was around $20,000. This indicates that investors are still patiently waiting for higher prices.
Moreover, CoinDesk also pointed out that public interest in BTC is currently relatively low. Searches for the world's largest cryptocurrency on Google are still below those of November 2021 and March of this year. This somewhat indicates that it will be a long time before the market reaches extreme excitement.