Bitcoin surpassed $67,000 for the first time in more than a month, fueling speculation that a second Trump presidency could soon send BTC to record highs.
Bitcoin's nearly 6% rise to $67,434 on Friday also helped the values of smaller tokens like Solana, Dogecoin and Avalanche rise more than 3%. Bitcoin hit an all-time high of almost $74,000 in March on optimism about demand for U.S. ETFs, which are allowed to hold tokens directly for the first time.
The increasing likelihood of Republican candidate Donald Trump becoming president is pushing Bitcoin and the rest of the cryptocurrency market higher, according to Stephane Ouellette, CEO of FRNT Financial. This is because a second Trump administration, if re-elected, would create a much more favorable regulatory environment for the crypto industry.
“We are on the verge of another bull market cycle similar to the one in 2021,” Ouellette said. Bitcoin reached its previous all-time high in late 2021.
Crypto is rallying even as stocks fall, disrupting the sector's recent correlation with other so-called risk assets. Most bands on the S&P 500 fell on Friday, giving the gauge its worst week since April.
In the days following the failed assassination attempt on Republican candidate Donald Trump, the odds of Trump becoming president rose to around 63%, according to PredictIt. Over the same period of time, the price of Bitcoin increased by around 15%.
The selection of JD Vance as the Republican vice presidential candidate is also a boost for crypto, according to Ouellette. Vance's ties to Silicon Valley and pro-crypto views could positively influence policy if Republicans retake the White House from President Joe Biden in November.
“While there is a premium for options exposed to the election, that premium is relatively low as Trump is currently the heavy favorite to win,” said FalconX Head of Markets Ravi Doshi. “This could of course change dramatically if Biden drops out of the race.”
*This is not investment advice.