The price of Bitcoin soared past $72,000 on Tuesday, hitting a six-month high as investors speculated on the outcome of the US presidential race.
Trading in New York saw the cryptocurrency rise 3.9 percent to $72,784.40, edging closer to its record high of $74,000 set in March.
The latest rally is largely due to what analysts call “Trump’s trade.” Republican candidate Donald Trump has vowed to position the United States as “the world’s biggest bitcoin power” if he returns to the White House. The promise has bolstered crypto investors, many of whom view Trump’s possible re-election as a performance for digital assets.
While Trump and Democratic candidate Kamala Harris remain neck-and-neck in the polls, market sentiment appears to be leaning toward a Trump victory. Trump, who once dismissed bitcoin as a “scam,” has tried to negotiate with the cryptocurrency industry, promising to fire Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), who has been vocal in his crackdown on crypto fraud.
Bitcoin supporters argue that the cryptocurrency serves as a hedge against inflation, given its fixed supply limit of 21 million coins, and there are already more than 19 million. A Trump presidency is expected to have deflationary consequences because of proposed tariffs on foreign goods, including a 20 percent global tariff and a possible 60 percent tariff on Chinese imports. However, Trump says these costs will not drive inflation.
Democratic nominee Kamala Harris has also voiced support for digital currencies, describing cryptocurrency as a key “industry of the future” in her latest economic strategy. His campaign has been in talks with crypto firms, showing his openness to working with the industry.
Market analyst Tony Sycamore from IG Australia noted that the current rise in the price of bitcoin reflects investors’ optimism about Trump’s victory. Meanwhile, Ryan Lee, a principal analyst at Bitget Research, noted that both Trump and Harris are leaning towards a clear position to regulate digital assets, although Trump’s rhetoric has encouraged market optimism.
Investor interest has also boosted other digital currencies. Ether, the second largest cryptocurrency by market capitalization, saw a rise of 3.9 percent, trading at $2,667 in New York on Tuesday.
Overall, bitcoin’s recent performance underscores the impact of political developments on cryptocurrency markets, as many investors are ready to closely monitor election results in the coming weeks.
