CFOTO | Future Publishing | Getty Images
Bitcoin hit a two-week high Monday, as betting markets suggested an increased chance of victory for crypto-friendly candidate Donald Trump in the U.S. presidential election.
The value of the world’s biggest cryptocurrency, bitcoin, was up 6% at $63,594.39, according to CoinGecko.
The rally follows the dramatic assassination attempt on the former president on Saturday.
“There is a ‘parallel’ to the 1981 shooting of President Reagan” even though that was not an election year, Ben Emons, chief investment officer at FedWatch Advisors, said in an emailed note.
“After the incident, Reagan’s popularity catapulted amidst a double-dip recession. The S&P 500, however, fell 9% in the aftermath due to economic malaise. But in the current strong economy, former President Trump’s favorability will likely skyrocket and impact markets positively.”
Investors said over the weekend they expected so-called Trump victory trade to receive a boost. Those trades broadened to include various crypto stocks such as Coinbase Global and miner Riot Platforms, which were up 4.5% and 5.25%, respectively, in premarket trading.
“Bitcoin’s price increased by about 9% over the weekend, which could signal that investors expect that a Trump presidency would create a more favorable regulatory climate for the crypto industry,” Zach Pandl, head of research at Grayscale Investments, told CNBC by email.
Trump has yet to set out any detailed proposals regarding cryptocurrency regulation, but the Republican candidate is now seen as broadly supportive of the sector — despite his past skepticism. He is due to speak at a major annual bitcoin conference later this month.
The Trump campaign began accepting donations from the crypto industry in May and his messaging has become increasingly positive on the future of such digital assets. He has also sought to position himself against Democrats who are in favor of reining in the sector, such as Sen. Elizabeth Warren.
Bitcoin.
“In addition, macro policy changes under a second Trump presidency — including ongoing deficit spending, reduced US leadership in international affairs, weaker Federal Reserve independence, and a desire for currency weakness to help shrink the trade deficit, among other things — could introduce downside risks for the US Dollar over the medium-term. Any downside risks for the US dollar could support Bitcoin’s price,” Pandl added.
Last month, analysts at Standard Chartered said the U.S. presidential election is the next key catalyst for the price of bitcoin and a Trump victory could push it as high as $150,000 by the year-end.
“Cryptocurrencies have not had an easy time in recent months. We are currently in a slump of previously booming capital inflows into this market that can be measured by stablecoin capitalisation, which has frozen over the past two months,” Grzegorz Drozdz, market analyst at Conotoxia, told CNBC by email.
With a higher probability of a Trump presidency, and consequent reduced chance of riots and destabilization in the U.S., Drozdz now sees a potential “influx of confidence in the markets” which could positively impact crypto and bitcoin in the coming weeks.