Trump's Victory Boosts Bitcoin and Crypto to Record Highs Post-Election, US Stocks Surge
Could Trump’s victory be the catalyst for a new surge in Bitcoin and cryptocurrencies? As global financial markets react to the results, Bitcoin and other digital assets are hitting new highs, mirroring the dramatic rise of US stocks. With such uncertainty surrounding global economies, it’s clear that the post-election landscape could reshape financial markets in ways we never imagined.
US shares hit record highs on Wall Street, and the dollar posted its biggest gain in eight years after Donald Trump’s historic re-election. Bitcoin and crypto also surged to all-time highs, fueled by Trump’s promise to prioritize the volatile cryptocurrency market. However, investors are betting that Trump’s plans to cut taxes and raise tariffs could drive inflation and slow the pace of interest rate cuts. With higher rates for longer, investors expect better returns on dollar-denominated savings and investments.
Markets and currencies worldwide saw dramatic shifts following the US election results on Wednesday:
- US stock indexes soared, with banks performing especially well.
- The dollar rose by about 1.65% against various currencies, including the pound, euro, and yen.
- The pound dropped 1.16% against the US dollar, hitting its lowest point since August.
- The FTSE 100, which tracks the UK’s largest companies, saw early gains but closed slightly down.
- The euro fell 1.89% against the US dollar, reaching its lowest level since June. Meanwhile, the German Dax and French CAC 40 dropped by 1.14% and 0.51% respectively.
- In Japan, the Nikkei 225 ended the day up by 2.6%.
- In China, the Shanghai Composite Index closed 0.1% lower, while Hong Kong’s Hang Seng dropped by around 2.23%.
These shifts show how global markets reacted to the election news, with mixed reactions across regions and currencies.
Why is Bitcoin Surging?
The value of Bitcoin has surged by over $6,600 (£5,120), reaching a record high of $75,999.04. This surge is partly due to Trump’s stance on crypto, which stands in stark contrast to the Biden administration’s crackdown on crypto firms. Trump has pledged to make the US the “Bitcoin superpower” of the world, fueling excitement in the market. During his election campaign, Trump even suggested he might fire Gary Gensler, the chair of the Securities and Exchange Commission (SEC), who has taken legal action against multiple crypto firms. This shift in leadership is creating a more favorable outlook for Bitcoin and the broader crypto market.
Trump announced plans to appoint billionaire Elon Musk to oversee an audit of government waste, aiming to bring efficiency to federal spending.
Musk, a long-time supporter of cryptocurrencies, is known for his bold moves in the digital currency space. In 2021, his company Tesla made headlines by investing a whopping $1.5 billion in Bitcoin, even though the price of the cryptocurrency can fluctuate wildly.
Tesla’s stock saw an impressive 14% jump on Wednesday, reaching a two-year high. As the largest shareholder of Tesla, Musk has been a staunch supporter of Trump’s presidential campaign.
Experts pointed out that financial markets were feeling the pressure, reacting to global uncertainty and the potential economic plans from Trump.
On Wednesday, US bond yields—the return the government promises to pay those who buy its debts—skyrocketed.
A bond is like an IOU, which can be traded on the financial markets. Governments sell bonds when they need to borrow money from investors.
This sharp rise in yields may signal that investors expect borrowing to increase under the new administration and are looking for a higher return on their investment.
Impact of Proposed Tariffs
Experts have raised concerns that Trump’s trade policies could come as a major shock to countries globally, including the eurozone and the UK economy.
In response, UK Chancellor Rachel Reeves has vowed that the UK will make strong efforts to communicate with President-elect Donald Trump about the importance of maintaining free and open global trade.
Reeves pointed out, “The US also gains significantly from access to global markets, benefiting from trade with us and others. This openness is key to our prosperity as nations.“
Trump has made it clear that, if he takes office, he intends to raise tariffs dramatically, with a particular focus on China, as part of his economic strategy.
Economic Impact and Global Concerns
Ahmet Kaya, principal economist at the National Institute of Economic and Social Research (NIESR), warned that the UK could be one of the nations hit hardest by Trump’s economic plans.
NIESR projects that the UK’s economic growth could fall to just 0.4% in 2025, down from an earlier estimate of 1.2%.
Katrina Ell, director of economic research at Moody’s Analytics, pointed out that Trump’s global trade policies are particularly troubling for Asia, especially given his protectionist approach and aggressive tariffs on imports to the US.
Trump’s more isolationist foreign policy has also sparked concerns about his commitment to defending Taiwan against possible threats from China. Taiwan is a major supplier of computer chips, essential components that power the global technology industry.
Meanwhile, investors have other important issues to monitor this week, with the US Federal Reserve set to announce its latest decision on interest rates this Thursday.
Trump’s Policies and the Future of Bitcoin: What’s Next for Global Markets?
As the markets adjust to these shifts, it remains to be seen how Trump’s policies will reshape the cryptocurrency landscape. With continued uncertainty in global markets, investors are keeping a close eye on how these dynamics will influence the future of Bitcoin and other digital assets.
