Bitcoin breaks $80,000 milestone as Trump’s pro-crypto stance fuels rally

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Bitcoin has surged past the US$80,000 mark for the first time, reaching A$122,894 on Sunday. This historic high comes as investor confidence soars following Trump’s re-election.

Bitcoin’s 80% gain in 2024 far exceeds the S&P 500’s 25.7% rise this year. The rally began during the lead-up to the election. Trump’s policies signal a significant departure from the Biden administration’s restrictive stance, suggesting a shift towards regulatory leniency for digital assets.

Under President Joe Biden, the Securities and Exchange Commission (SEC), led by Chairman Gary Gensler, enforced stringent regulations on the crypto sector, citing fraud and compliance issues. Gensler spearheaded lawsuits against major crypto exchanges. 

In stark contrast, Trump has pledged to fire Gensler on his first day in office. The election also saw Senate Banking Chairman Sherrod Brown, a known critic of crypto, voted out in favour of pro-crypto candidate Bernie Moreno. 

Trump’s commitment to supporting digital assets marks a significant shift from his earlier scepticism. In September, he launched World Liberty Financial, underlining his new belief in the industry’s potential. “It’s very young and very growing,” Trump said at the launch. “I do believe in it.” His administration plans to establish a national strategic Bitcoin reserve and appoint crypto-friendly regulators to lead key agencies.

The broader crypto industry played an active role in shaping this political shift, pouring tens of millions of dollars into supporting candidates who advocated for looser regulations. Political action committees such as Fairshake and related groups received substantial donations from crypto companies, including Coinbase and Ripple, to back candidates who favour a more permissive regulatory approach. 

The changing political climate has had immediate effects on the market. BlackRock’s iShares Bitcoin Trust saw daily net inflows of $1.4 billion in early November, and VanEck’s Bitcoin ETF on the ASX reported record trading volumes. Caroline Bowler, CEO of BTC Markets, noted a resurgence in activity, stating, “People that hadn’t traded on our platform since 2019 are now coming back into the market.”

Optimism has spread to other digital assets as well, with gains recorded in Ethereum, Dogecoin, and Solana. Analysts like Bitwise CEO Hunter Horsley anticipate Bitcoin’s rally could extend further, potentially reaching $100,000. 

Some caution remains. Nevertheless, the overall sentiment is buoyant.

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