Bitcoin soared over $80,000 on Sunday as the optimism around Donald Trump’s crypto-friendly stance grows.
Trump’s victory and the Republican-controlled Senate and near-majority House have fueled bullish sentiment in digital asset markets, pushing the cryptocurrency up as much as 4.7% to $80,092.
The president-elect expressed his support of digital assets and promised to make the United States a leader in this industry.
He proposed creating a Bitcoin strategic reserve during his election campaign and promised to name regulators who had a positive view on digital currencies.
Bitcoin rallys due to ETF and pro-crypto policy
Bitcoin’s price has increased by nearly 91% since 2024. This is due to the growing popularity of U.S. Bitcoin Exchange-Traded Funds (ETFs), as well as Federal Reserve rate cuts.
Analysts view Trump’s election win as pivotal for the cryptocurrency market. The crypto-market has experienced new records since the elections and has increased investor confidence.
This surge can be attributed not just to Trump’s plans to use Bitcoin, but to the massive inflows of money into BlackRock-managed iShares Bitcoin Trust ETF.
After the elections, iShares Bitcoin Trust experienced a daily net inflow record of $1.4 billion, and trading volumes reached their highest levels on Wednesday.
Industry experts think that this inflow highlights the impact of the pro-crypto sentiments during the new administration.
Le Shi, the managing director of Hong Kong’s Auros market-making company, noted that there was an immediate response from the market.
It was inevitable that a crypto-related run-up would occur, given Trump’s perceived pro-crypto stance. And this is what’s happening now.
The new Congress could ease crypto regulations
Washington’s attitude towards digital assets has changed significantly since the 2024 elections.
Gary Gensler was the head of the Securities and Exchange Commission, which became more strict in its regulation during the Biden Administration. He cited fraud and other misconduct that occurred within the crypto sector.
The result was a series of high-profile raids. Most notably, Sam Bankman Fried’s FTX Exchange collapsed after accusations of financial fraud.
Trump’s promise of a more friendly crypto policy could be viewed as a radical departure from Biden’s clampdown.
Analysts say that this political shift will lead to more investment in digital assets, as the regulatory risk is likely to ease.
Bitcoin is outperforming traditional assets
Bitcoin has outperformed traditional investments such as stocks and gold this year. Bitcoin has seen its year-to date gains reach nearly 91% in the aftermath of Trump’s victory, and continues to be attractive to investors looking for alternatives to traditional assets.
Bloomberg reports that the iShares ETF, as well as other Bitcoin funds managed by BlackRock and Fidelity are responsible for attracting approximately $23.6 billion in net inflows to 2024.
These ETF inflows are seen by many as crucial to Bitcoin’s movement. This is especially true given the fact that SEC has long refused to approve spot Bitcoin ETFs.
These funds were approved in 2023, following a court decision that was pivotal. This marked an important milestone in digital assets. The launch of ETFs is one of the biggest events to take place in the crypto space.
Trump’s crypto-friendly stance increases market confidence
Trump has advocated that the US become a crypto-powerhouse. He promised to establish a Bitcoin strategic reserve, and to appoint regulatory officials who were sympathetic towards digital currencies.
He has won the support of several leaders in industry and advocates for digital assets, who are hopeful that his vision will increase adoption.
Trump’s election victory has been seen by many as a symbol of success for the crypto-industry, which contributed heavily to candidates who were pro-crypto.
Insiders in the industry are confident that Trump’s administration will pass legislation that is favorable to digital assets. This would create an innovation-friendly environment.
Trump’s victory has sparked an upsurge in the crypto markets, as Ethereum, which is famously supported Elon Musk and Dogecoin have both risen by over 18%.
This increase is a response to Trump’s promises of crypto-friendly policy and a general shift towards a supportive US regulatory structure for digital assets.
Interest rate outlook and market volatility
Bitcoin’s implied Volatility Index has risen to levels last seen in mid-2023, since Trump’s victory.
Investors are watching closely how Trump’s potential fiscal policy and deregulation strategy will impact interest rates and inflation.
The yield on US Treasury 10-year bonds jumped to 4.44%. This was due to expectations that Trump’s policies would maintain high interest rates in the near term.
Caroline Mauron is the co-founder and CEO of Orbit Markets. They provide crypto derivatives liquid.
Options market signals expected movements of around 8% either way the day following the election, as opposed to a normal 2% increase or decrease on a regular day.
The expected volatility in digital assets hasn’t deterred many investors. They see Trump’s victory as a catalyst to long-term growth.
Crypto under Trump Administration
Industry watchers are optimistic as Trump is about to take office that his administration will implement policies which further legitimize digital currency.
Investors eagerly await details about Trump’s plan for a Bitcoin reserve, a move which could create a stable base for cryptocurrency.
With the Republican-controlled Congress likely to push for more accommodating crypto legislation, market participants are hopeful that Trump’s term will encourage mainstream adoption and integrate digital assets more deeply into the US economy.
The post Bitcoin hits $80000 as Trump’s cryptocurrency-friendly position gains momentum may change as new information becomes available.
