Driven by Trump win: Bitcoin smashes $75k milestone

7 Nov 2024

Driven by expectations that a second Trump presidency could usher in more favourable policies and regulations for cryptocurrency, Bitcoin surpassed $75,000 for the first time.

Source: Reuters.

The Bitcoin options market was already targeting $80,000 for late November expiries even before yesterday's vote.

$73,500 was the previous high in March this year.

The cryptocurrency is currently trading at ZAR 1,302,085 (at 15h15). The rest of the crypto market has also surged. The futures market suggests that the record-breaking rally in Bitcoin, sparked by Donald Trump’s victory in the US presidential election, may be only the beginning.

There is a strong shift toward risk-taking behaviour in the derivatives market following this recent price surge.

The basis, or difference between futures and spot prices on the Chicago Mercantile Exchange (CME), has risen significantly. Furthermore, perpetual swaps (a type of derivative) have shifted from trading below the spot market price to trading at a significant premium.

US institutions favour CME Bitcoin futures to capture gains, while offshore investors drive demand in perpetual futures - derivative contracts that don’t have an expiration date - signaling increased leverage interest.

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Pro-crypto sentiment surges

Traders favour Trump’s pro-crypto stance, which some speculate could bring a friendlier regulatory environment to the sector.

Says Christo de Wit, Luno country manager, “Trump has repeatedly and publicly vocalised his support for the development of the cryptocurrency industry in the US, whereas Kamala Harris has been less clear about plans for the industry’s future should she win the election.

"We’ve seen a significant uptick in trading volume on Luno over the past 24 hours in response to the positive market movements.”

Bitcoin and Ethereum both spiked over 8% on Wednesday, 6 November 2024, while others like Dogecoin and Uniswap were stealing the show with 20% and 30% gains, respectively, over the last day. The market cap for all cryptos jumped 14% overnight, and trading volumes across the industry more than doubled.

Top 5 movers Over 24hrs as of 13:00 6 November 2024