BTC is up 30% since Americans took to the polls

BTC has climbed above USD 88k for the first time, marking a fresh record for the cryptocurrency that has witnessed a surge of investor interest since Donald Trump was reelected to the Oval Office on 5 November. In just 12 days, BTC is up 30.5% and saw its biggest gains yesterday as Republicans continued to inch closer to an increasingly likely House majority, rising 10.1% in the previous 24 hours at the time of writing.

Options traders are forecasting BTC to hit the USD 100k mark by the end of the year, with crypto exchange Deribit recording investors lining up to price in the ambitious target. Cumberland Labs’ Chris Newhouse heralded the market entering an “undeniable bull market for the next few years” in comments to Bloomberg.

The presidential-elect’s pro-crypto agenda is driving the rally, with crypto investors looking towards Trump’s talk of solidifying the US’ position in the industry, vow to make a strategic crypto stockpile, and changing the regulatory tone around digital assets — in stark contrast to the Biden administration. BTC Inc’s David Bailey described Trump’s being elected as a chance to “advance transformational legislation” in the sector.

A historically crypto-friendly Congress is also pushing up confidence in digital assets, as a Republican majority in the Senate and likely soon the House will welcome pro-digital asset lawmakers — many of which would have received some of the USD 100 mn from the industry to support their election campaigns.

The greenback, Wall Street stocks, and what are now being called “Trump trades” have also had a strong 12 days, with the S&P 500 hitting fresh records, US stocks recording their best week of the year last week, and the USD strengthening against its peers.

But much of the optimism may be misplaced, with Citi’s Drew Pettit arguing that amid the “euphoria territory,” many are “skipping the argument that bad things may happen,” reports the Financial Times. The US economy could soon be set to see the return of rising inflation, steep deficits, warn economists, as mass deportations, tariffs, monetary policy interference, and tax cuts proposed by Trump could push the country’s economy off course — and with it the recent enthusiasm for Trump trades.

MARKETS THIS MORNING-

The post-election rally doesn’t seem to spreading to the Asian markets in early trading this morning, with the Hang Seng starting the day in the red at -0.5, followed by the Kopsi at -0.4%, while the Shanghai index is up 0.1% and the Nikkei leading the pack in the green at 0.7%.

THE CLOSING BELL-

The ADX fell 0.1% yesterday on turnover of AED 1.3 bn. The index is down 1.5% YTD.

In the green: Fujairah Building Industries (+14.8%), Gulf Medical Projects Company (+12.2%) and Ras Al Khaimah National Ins. Company (+10%).

In the red: Fertiglobe (-5.2%), Foodco National Foodstuff (-4.5%) and Americana Restaurants International (-3.7%).

Over on the DFM, the index rose 0.3% on turnover of AED 262.1 mn. Meanwhile, Nasdaq Dubai closed up 0.3%.