In the wake of the landslide victory of Donald Trump in the presidential elections of 2024, Bitcoin went upwards meteorically to unseen heights. This post looks at the short-term fluctuations of Bitcoin, what is causing it to keep this bullish run, and what that means for investors who own this virtual currency.
Bitcoin surging price
With Trump’s election win, Bitcoin’s price surged and for the first time in history crossed the $80,000 mark. Bitcoin, which shortly after the announcement of the election results on November 6 had reached approximately $75,345, went up further on November 11, peaking at around $81,600-an over 8% rise within days of the election results.
The hype on Bitcoin isn’t purely market speculation but a wider investor sentiment on Trump’s crypto-friendly regime. Traders are confident the new administration won’t adopt a more hostile regulatory environment for the digital currency, one which has seen many investors shun it in the past.
Catalysts for the rally
There are several fundamental reasons contributing to this exponential surge in the price of Bitcoin:
- Crypto policies: The crypto-friendly policy that Trump has promoted sees him shift his rhetoric from skepticism to virtual currency advocate. Trump vowed to make the U.S. the “crypto capital of the world.” The promise gave investors in his leadership a reason to be confident. Among his campaign promises was a strategic stockpile of Bitcoin and the appointment of regulators who would view digital assets favorably.
- Market sentiment: Cryptocurrency markets are considered sentiment-driven and speculative. For instance, following the victory of Trump, there was speculation by many traders that a wave of institutional investment may take place as they would expect a more friendly regulatory environment. Optimism has therefore propelled Bitcoin and other cryptocurrencies due to the buying pressure following that event.
- Historical trends: Historically, Bitcoin experiences considerable price surges throughout election years and right after significant political events. But the perfect storm has materialized in light of Trump’s victory and vows upon the cryptocurrency that duly triggered this mass bearish mood of the market.
Impact on investors
The current momentum in the price of Bitcoin presents holders of the asset – and those thinking of investing in it – an opportunity and a risk:
- Maximum return: With the rise above $80,000, Bitcoin promises maximum return. Those who invested in the cryptocurrency early enough are enjoying windfalls. Indeed, anyone who had invested in the digital currency during some of its earlier dips now finds themselves in the middle of returns that few other investments could hope to match.
- Volatility risks: Despite the recent rise of Bitcoin, it remains highly volatile. The quick spikes in price tend to self-correct rather quickly. Investors are warned to be prepared for any eventuality and consider their risk appetite as they trade in such a tumultuous market.
- Long-term trends: Trump according to commentators could continue to see Bitcoin rise especially if Trump presses through his promises of regulating cryptocurrency and supporting it. Some speculate that it could reach up to 100,000 dollars within a year if current trends hold34. This, however, would depend on other factors such as changes in regulation and other economic conditions.
Market dynamics since the Election
The effects of Trump’s win were not limited only to Bitcoin but spilled over into other cryptocurrencies where other coins such as Ethereum and Dogecoin also appreciated considerably because of the spillover effect from investor euphoria. Crypto market capitalization rose greatly when traders responded well to Trump’s election outcome and his pro-crypto agenda.
The trend indeed looks to be improving for Bitcoin, with institutional interest in the digital asset also on the rise. Large financial firms are gradually beginning to consider cryptocurrency a legitimate class of investment. The recent upward momentum may see higher institutional money inflow into the crypto market, which will further drive prices upwards.
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