(Bloomberg) — Bitcoin surpassed $67,000 for the first time in more than a month, reviving speculation that the largest cryptocurrency may soon make another run at record highs amid optimism that a second Trump presidency will be beneficial for digital assets.
The surge of almost 6% to $67,434 on Friday by the crypto market’s bellwether helped to lift the fortunes of smaller tokens such as Solana, Dogecoin and Avalanche, which were all up more than 3%. Bitcoin reached an all-time high of almost $74,000 in March amid optimism over demand for US exchange-traded funds that had been allowed to hold the token directly for the first time.
The increased likelihood of Republican nominee Donald Trump becoming president is driving Bitcoin and the rest of the cryptocurrency market higher, according to FRNT Financial Chief Executive Officer Stephane Ouellette. That’s because, if elected again, a second Trump administration would create a much more favorable regulatory environment for the crypto industry, he said.
“We’re on the precipice of another bull market cycle, similar to 2021,” said Ouellette. Bitcoin reached its previous all-time high in late 2021.
Crypto is rallying even as stocks are falling, eroding the sector’s recent correlation with other so-called risk assets. Most groups in the S&P 500 dropped Friday, with the gauge having its worst week since April.
In the days following a failed assassination attempt against Republican nominee Donald Trump, the odds of him becoming president have risen to around 63%, according to PredictIt. In about the same time, the price of Bitcoin has jumped around 15%.
JD Vance being selected as the Repubican vice presidential candidate is also a tailwind for crypto, according to Ouellette. Vance’s ties to Silicon Valley and pro-crypto views will favorably impact policy if the Republicans win back the White House in November from President Joe Biden, he said.
“While there is a premium for options that have election exposure, it is relatively muted since Trump is currently the runaway favorite to win,” said FalconX Head of Markets Ravi Doshi. “That could of course change drastically if Biden drops out of the race.”
FalconX’s derivatives desk has seen largely bullish longer dated flows through the end of the year, Doshi said.
©2024 Bloomberg L.P.
Read More: Bitcoin Hits One-Month High, Revives Talk of Another Record Run
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