Would Trump's America rhyme with bitcoin? The digital currency exceeded the $75,000 mark for the very first time on Wednesday, boosted by the prospect of regulatory relaxation favorable to digital currencies with the prospect of Donald Trump's victory in the American presidential election.
After having exceeded its last absolute peak dating back to last March ($73,797.98), the first digital currency by capitalization climbed to $75,005 around 4:08 a.m. (French time), an increase of some 8%. It then saw its rating fall again and was trading at $74,725 around 5:30 a.m. (French time).
The price of bitcoin soared in unison with the country's standard currency, the dollar, in markets riveted to the first results of the American presidential election, including states won by Donald Trump with a margin considered sufficient to augur the outcome of the election.
The Republican candidate also won a first major victory by winning the “swing state” of North Carolina, known to be contested and highly coveted by his rival Kamala Harris, before winning Georgia.
“Bitcoin is one of the main assets at the heart of exchanges on the evening of the American election in my opinion: it is relatively liquid (easy to sell, Editor’s note) and extremely dependent on the outcome of the election,” reacted Fredrick Collins, from the VeloData platform, cited by the Bloomberg agency. He therefore considers it very likely “that the rise in the price (of bitcoin) is closely associated with the increased prospects of a Trump victory”. The former president pledged during the campaign to make the United States “the world capital of bitcoin and cryptocurrencies”, by imposing an extremely relaxed regulatory framework.
Ether – another major digital currency – was also trading on Wednesday around 5:30 a.m. (French time) at $2,599, up 6%. “Memecoins”, these highly volatile parodic digital currencies are also experiencing a boost, like the “dogecoin” promoted by Elon Musk – American boss and fervent supporter of Donald Trump. A wind of digital madness of sorts.
Deregulation and liquidity
“The price of bitcoin closely follows Trump's position in the polls” because for investors, a Republican victory would lead to an increase in demand for the digital currency,” Russ Mould, analyst at AJ Bell, explained before the election.
By posing as the champion of cryptocurrencies, the businessman takes the opposite view of the Biden government, considered to be in favor of strict regulation of the sector, even if Democrat Kamala Harris tried to give pledges to reassure holders of cryptocurrencies.
The “return to power (of Trump) would likely emphasize deregulation, tax incentives and economic policies favorable to alternative investments, such as bitcoin,” said Nigel Green, at deVere.
The analyst also notes that the Republican's previous term “was marked by significant corporate tax cuts, which injected additional liquidity into the markets, thus promoting investment in high-growth assets” . “His administration could roll back some regulatory tightening measures from the Biden era and create initiatives such as a strategic national stockpile of bitcoins », promoting investment and innovation, adds John Plassard, analyst at Mirabaud.
A sign of his enthusiasm, Donald announced with great fanfare the creation of his own platform dedicated to digital currencies: called World Liberty Financial, the latter finally saw a launch in October without much fanfare. It offers services based on so-called decentralized finance, a mechanism which allows you to no longer go through an intermediary such as a bank for your transactions.
Investment product
At the start of the year, the price of bitcoin was driven by anticipation of the “halving”, a technical event which reduces the supply of new bitcoins approximately every four years. It consists of halving the bitcoin reward granted to “miners”, users who contribute to the operation of the digital token by providing their computing power.
The digital asset also owes its rise to the debut of a new investment product on the American market, an index fund (ETF) indexed to bitcoin, which allows investors to benefit from fluctuations in the price of this cryptocurrency without owning it. directly.
Since their launch on January 11 in the United States, the twelve bitcoin-backed ETF funds have accumulated the equivalent of approximately $68.51 billion, or approximately 5% of the bitcoins in circulation, according to the SoSoValue site.
