The price of bitcoin has risen above $81,000 for the first time as it benefited from traders’ hopes that Donald Trump will favour cryptocurrencies when he returns to the White House.
Bitcoin touched a record high of $81,899, before dropping back to about $81,100, a gain of about 2.7% on Monday. The price has more than doubled from about $37,000 12 months ago.
Trump has in the past called bitcoin a “scam against the dollar”, but he changed his tune on cryptocurrency during the US presidential election campaign, courting the crypto community and appearing at industry events. That has created an expectation of a relaxation of rules to make it easier for retail savers to invest in bitcoin and other cryptocurrencies – although Trump has not specified any policies.
Prices have also risen for other cryptocurrencies such as ethereum and dogecoin, a meme coin previously backed by Elon Musk, the chief executive of Tesla and owner of X who has become a vocal Trump supporter and whose wealth rose by $26.5bn shortly after the election result was confirmed.
Trump even went as far as giving his backing in September to a cryptocurrency venture, World Liberty Financial, run by his family, a move that could leave him open to criticisms over potential conflicts of interest if he moves to deregulate digital assets. His son, Donald Trump Jr, has said that cryptocurrency offers an alternative to a banking system that he alleges is tilted against conservatives.
Bob Savage, the head of markets strategy and insights at BNY Mellon, a US investment bank, said that the bitcoin price move was one of the “Trump trades” that appeared “central to judging the mood of markets” as investors try to work out the impact of the election.
Matt Simpson, a senior market analyst at City Index, described the moves on crypto markets as a “Trump pump” as traders bet that the president-elect will usher in a period of cryptocurrency adoption.
The price of bitcoin correlated to Trump’s vote share in opinion polls during the election campaign against the Democrats’ candidate, Kamala Harris. It was below $70,000 on election day last Tuesday, but has gained nearly a fifth in value since then.
The surge has prompted a wave of excitement among crypto investors. Interest in crypto tends to increase as prices rise. Google Trends data showed that the number of people searching online for “bitcoin” has reached its highest since early March, although it remained about half that of its peak in May 2021, when prices soared as investment banks started to take interest before slumping.
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Naeem Aslam, the chief investment officer at Zaye Capital Markets, a trading consultancy, said crypto traders were hoping for the price to hit $100,000 this week.
Hitting the landmark figure “would make some traders nervous as they would think that the price has gone too far and too quickly, which means that we are going to see a correction shortly,” he said. “However, the crypto community also believes that the game has totally changed for bitcoin with President Trump taking the office back.”