Bitcoin’s price has crossed $80,000 for the first time, influenced by investor optimism around potential changes in US cryptocurrency regulations.
On Monday afternoon, Bitcoin touched a record high of $81,899, before dropping back to about $81,100, a gain of about 2.7% in just one day. This surge is part of a broader cryptocurrency rally, with Ethereum rising by 8% and Cardano increasing by more than 30% during the weekend following the US election.
The price of Bitcoin alone has more than doubled from about $37,000 12 months ago, as investors are increasingly accumulating Bitcoin-related assets, anticipating more favourable US cryptocurrency regulations. In a research note to CNBC, Citi strategists highlighted that crypto had been one of the “few Trump trades that has yet to retrace.”
“This record high could also be the driver that brings retail interest back to the ‘euphoria’ levels we’ve seen in previous cycles, that the asset class hasn’t quite experienced this year,” said Josh Gilbert, Market Analyst at eToro. “Although Bitcoin is sitting at record highs, it really feels like this rally could just be getting started. This bull market has a lot of weight behind it, and that could keep driving the asset higher.”
Trump has, in the past, called Bitcoin a “scam against the dollar”. However, the President-elect changed his view on cryptocurrencies during the last election campaign, gaining the support of the crypto community and appearing at industry events. His support has gone as far as to back a cryptocurrency venture, World Liberty Financial, run by his family.
Therefore, the change in administration could lead to a more crypto-friendly regulatory environment. However, analysts caution that potential policy changes, such as tariffs, could impact inflation and weigh on the cryptocurrency markets. The political landscape, including control of the US House and Senate, could also influence market movements.
Barring any big economic disturbances, some analysts expect Bitcoin to reach $100,000 by the end of the year.
