Crypto-linked stocks showed strong gains in premarket trading on Wednesday following Donald Trump’s victory in the US presidential election.
The uptick in crypto stocks follows a massive upswing in cryptocurrency prices as Bitcoin set a new peak above $75,000. Crypto’s market size grew 7% overnight to reach $2.6 trillion.
This rally will likely drive Bitcoin up to $90,000 by the end of 2024 and to $200,000 by the end of next year, according to a note from research and brokerage firm Bernstein on Wednesday.
“The market’s first reaction could be to ‘sell the news’, but we suggest investors in stocks with exposure to Bitcoin use the marginal dip here as an enhanced buying opportunity to capture the upside over next 12 months” Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia wrote.
Trump’s victory has driven the rally as he is seen as more positive towards crypto than his predecessor. He is expected to introduce new industry-friendly police after his inauguration in January.
Crypto uptick
Wednesday’s uptick in crypto stocks also comes after a general downtrend in the week leading to the vote.
Coinbase stock price is up 15% in premarket trading. Fellow consumer trading platform Robinhood also begun the day on a high, flashing a 10.5% increase in premarket trading.
MicroStrategy, the company with the largest Bitcoin balance sheet of more than $1.8 billion, saw its stock price surge by 15%.
Bitcoin mining stocks also rose. CleanSpark had a 15% rally in premarket trading. Others, including Canaan, Marathon Holdings, and Hut 8, are also posting double-digit gains. The market is set to open at 4pm GMT.
US stocks in general are poised for a positive opening on Wednesday.
The three major US market indices ― S&P 500, Dow Jones, and Nasdaq ― are positive in the last 24 hours.
Trump win
The uptick in crypto stocks comes amid a market buzzing from the news of Trump’s victory.
Trump promised support for the industry during his campaign and pledged to position the US as crypto’s global capital.
Bitcoin miners in particular have reasons to be excited about a Trump presidency.
This summer, Trump said that the US should lead the world in Bitcoin mining. He has slammed President Joe Biden’s administration for not taking the lead on Bitcoin mining and allowing China and Russia to dominate the sector.
On the campaign trail, Trump also said his administration would make “so much electricity” available to Bitcoin miners.
Crypto miners in the US came under scrutiny from Congress this year with Senator Elizabeth Warren alleging money laundering and national security threats associated with crypto mining.
Bitcoin miners are also coming under increased competition for energy with artificial intelligence-related companies.
Marathon last month began producing energy to power its facilities from shale oil.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
