Bitcoin price has increased sharply after former US President Donald Trump escaped a failed assassination attempt, pushing his odds of winning the 2024 election higher and higher.
According to the Financial Times, the world's largest cryptocurrency rose 9.1% to $62,830 on Monday, its highest level in the past two weeks. While investors believe that the possibility of Mr. Trump returning to the White House will benefit the cryptocurrency market.
Source: CoinDesk
Mr. Trump is known as a Bitcoin supporter, having hosted many technology industry leaders at his Mar-a-Lago resort and supporting domestic Bitcoin mining activities.
Trump's 2024 campaign has also accepted payments in cryptocurrency, an unprecedented move for a US presidential candidate.
“The probability of Mr. Trump winning has increased significantly,” said Grzegorz Dróżdż, an analyst at currency company Conotoxia.
Spillover effects on financial markets
Optimism about Mr Trump’s chances of winning the election also spilled over into the stock market. Shares of Truth Social, the social network founded by Mr Trump, jumped 60% in premarket trading.
However, some experts warn that the US political outlook remains uncertain and market developments could change rapidly.
The prospect of a second term for Mr Trump also affected broader financial markets, with Treasury yields and the dollar rising slightly, a more subdued reaction than after Mr Biden’s disappointing performance in the debate.
Many investors believe Mr Trump’s tax cuts will lead to higher deficits and inflation, hurting US Treasury bonds and boosting the dollar, following a similar pattern after his victory in 2016.
The dollar index, which tracks the greenback against a basket of six major currencies, rose 0.2% in morning trade, after weakening in July as traders bet the Federal Reserve would cut interest rates in September.
The yield on the benchmark 10-year Treasury note rose 0.03 percentage point to 4.21%, reflecting a slight decline. Futures on the S&P 500 and Nasdaq 100, which represent blue-chip and technology stocks, rose 0.3% and 0.5%, respectively, in pre-market trading in New York.
Monday’s moves “fit in with the theme of Trump being good for business and… his pro-crypto stance,” Rabobank analysts said in a note to clients.
“For markets, the complexities of the US political landscape have been simplified into the assumption that the weekend’s events will increase the likelihood of a Trump victory in the November presidential election,” they added.
Bitcoin peaked above $70,000 in mid-March but has struggled since its “halving” event in April, when the daily number of Bitcoins that miners can receive for securing the Bitcoin network dropped from 900 to 450. Some analysts had previously predicted a price increase for Bitcoin after the halving event.
