Bitcoin surged above $72,000 for the first time since June, supported by heavy inflows into specialist exchange-traded funds and speculation over the outcome of next week’s US election.
The largest digital asset rose about 2.7% before paring some of its gains to trade at $72,500 at 5:00pm London time on Tuesday. Smaller cryptocurrencies such as Ethereum (the second-largest cryptocurrency) and meme-favorite Dogecoin also advanced.
Bitcoin is seen by some as a trade linked to former President Donald Trump’s presidency, given that the Republican presidential candidate has voiced support for cryptocurrencies during his campaign. Market expectations show Trump ahead, while opinion polls suggest a tight race between him and Democratic Vice President Kamala Harris.
The cryptocurrency has been supported by an overnight surge in stocks and continues to “price in a Donald Trump election win,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. Bitcoin needs a sustained break above $70,000 to bolster confidence in its ability to rally beyond March’s record high of $73,798, he added.
Trump has pledged to make the United States “the crypto capital of the world,” while Kamala Harris has taken a more moderate approach, promising to support a regulatory framework for the industry. The divergence in positions contrasts with the tightening of the market under President Joe Biden.
Options traders have increased their bets that bitcoin will hit $80,000 by the end of November regardless of the election outcome. Expectations are for volatility to rise as Election Day approaches on Nov. 5.
Bitcoin ETFs in the United States have seen net inflows of about $3.6 billion this month. The coin's price also jumped 69% in 2024, maintaining its stability despite declining expectations of a Federal Reserve rate cut and increased scrutiny of Tether, a stablecoin central to the cryptocurrency market.
