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Bitcoin Hits Record High as U.S. Election Sparks Market Rally
Last Updated: 6th November 2024 - 01:16 pm
Bitcoin soared to a new record, climbing over 8% to surpass $75,000, as results from the U.S. presidential election began rolling in. The cryptocurrency’s upward movement reflects market anticipation, especially among traders speculating that a favorable outcome for Donald Trump could benefit the digital asset industry. Trump's platform, which includes strong support for digital assets, is viewed by many investors as a positive signal for cryptocurrency growth. In contrast, Kamala Harris has indicated a more cautious stance on the sector, emphasizing regulatory oversight.
Bitcoin’s climb extended as preliminary election counts showed Trump leading in key states like Georgia and North Carolina. By 10:08 p.m. in New York, Bitcoin reached a high of $75,000, breaking its previous record set in March. Other major cryptocurrencies followed suit; Ethereum gained 6.5%, while Dogecoin, bolstered by its association with Trump supporter Elon Musk, surged by 18%.
Ahead of election day, spot-Bitcoin ETFs experienced record outflows of $579.5 million as investors positioned themselves cautiously. The introduction of Bitcoin ETFs this year, led by firms like BlackRock and Fidelity, has driven significant inflows, with $23.6 billion added so far. Analysts attribute Bitcoin’s impressive 70% rise in 2024 partly to these ETFs, which have outperformed traditional assets like stocks and gold.
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The 30-day implied volatility for Bitcoin reached levels not seen since the political uncertainty of July, signaling expectations of significant price movements. Caroline Mauron, co-founder of Orbit Markets, indicated that Bitcoin options are predicting an 8% price swing in either direction following the election results, a sharp increase from the usual 2% movement. Traders expect continued volatility until the results are fully counted.
This election has seen cryptocurrency take a prominent role, with both candidates’ positions potentially reshaping the industry. Trump has committed to establishing the U.S. as a global crypto hub, proposing policies like a Bitcoin reserve and crypto-friendly regulators. Harris has favored a structured regulatory framework, aiming to clarify industry rules rather than fostering expansive growth. Analysts see a Trump victory as potentially propelling digital assets, while a Harris win could bring short-term declines in prices.
Crypto industry leaders are hopeful that either of the candidates will bring a friendlier approach to digital assets, contrasting sharply with President Joe Biden’s administration, which took a tough stance, issuing many enforcement actions against crypto companies through the SEC.
Under Biden, digital asset firms have often voiced frustration, saying regulators preferred strict enforcement over developing a clear set of rules for the growing industry. SEC Chair Gary Gensler has been openly critical of the crypto sector, frequently calling it prone to fraud and misconduct. This regulatory crackdown intensified after the 2022 market downturn and high-profile collapses, such as the FTX bankruptcy led by Sam Bankman-Fried.
To Summarize
The cryptocurrency market remains closely tied to the outcome of the U.S. election, reflecting its growing political importance. Traders are bracing for significant price swings, with analysts predicting potential short-term declines if Harris wins, while Trump’s victory could lead to further price gains in the digital asset space.
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