Bitcoin on a record-breaking rally, now nearing $90,000 mark
What's the story
Bitcoin, the world's largest cryptocurrency, is on a record-breaking rally, closing in on $90,000.
The surge has been largely driven by Donald Trump's recent election victory in the US, and his supportive stance toward cryptocurrencies.
Investors are optimistic about a crypto-friendly administration under Trump, which has led to a significant increase in both Bitcoin and related stocks.
Market response
Trump's pro-crypto stance fuels market optimism
Following Trump's election, Bitcoin saw a huge spike of more than 25% since November 5, hitting $89,637 in Asia.
The surge is also reflected by Tesla, which witnessed a nearly 40% jump after the election results.
Nick Twidale, Chief Market Analyst at ATFX Global in Sydney, credits Trump's support for the industry and expects higher demand for both crypto stocks and currencies themselves.
Future prospects
Trump's plans for US as 'crypto capital'
During his campaign, Trump promised to turn the US into the "crypto capital of the world" and build a national reserve of Bitcoin.
This promise has fueled speculative growth in crypto mining and trading stocks.
Matthew Dibb, Chief Investment Officer at Astronaut Capital, thinks this move could lead other countries to buy Bitcoin in a bid to keep up with the US.
Stock performance
Crypto stocks soar
In the wake of Trump's election victory, crypto miner Riot Platforms surged nearly 17% on Wall Street and continued to rise in after-hours trading.
Other miners such as MARA Holdings and CleanSpark also witnessed massive gains of nearly 30%.
Software giant MicroStrategy, a Bitcoin investor, revealed it had invested about $2 billion in Bitcoin between October 31 and November 10, sending its shares up by 26%.
Wider impact
Impact on broader crypto landscape
The post-election enthusiasm has also extended to the wider crypto market, with smaller tokens like Ether and Dogecoin also witnessing spikes.
Investors are optimistic about lesser scrutiny from the US Securities and Exchange Commission (SEC) under Trump's administration.
Notably, in September, Trump launched a new crypto business, World Liberty Financial, further indicating his support for the industry.
ETF growth
Trump's victory boosts cryptocurrency ETFs
Trump's election victory has also benefited cryptocurrency exchange-traded funds (ETFs).
On November 7, Bitcoin ETFs saw their biggest inflows ever, attracting a net $1.38 billion, Citigroup data showed.
Analysts from the bank observed major inflows across the board and expect this to continue in the near term.
Marion Laboure from Deutsche Bank expects potential rate cuts from the Federal Reserve to further boost the cryptocurrency market.