Bitcoin ($BTC) reached an all-time high yesterday, with CoinMarketCap reporting a peak of $76,460.15.
This sets a new record above previous highs, including one earlier this year at $73,800, and the last bull cycle’s top of $69,000 in November 2021.
CoinMarketCap, an aggregator of cryptocurrency data from various exchanges, shows a broader picture of market trends rather than prices on a single exchange.
Analysts note that US elections often boost the price of Bitcoin, predicting gains that may continue for around 12 months.
Some suggest this could be the start of another “bull run”, which could lead to even higher prices over the next year.
‘Debasement Trade’ and Trump’s influence
According to analysts at JPMorgan, Donald Trump’s recent presidential win could support both Bitcoin and Gold, thanks to what they call the “debasement trade”.
This investment approach involves buying assets like Bitcoin and Gold, which can retain value if inflation rises or the currency weakens. When a currency loses value, these types of assets are seen as safer options.
In a recent report, JPMorgan’s Managing Director, Nikolaos Panigirtzoglou, said the “debasement trade” will likely get stronger due to “tariffs, geopolitical tensions, and expansionary fiscal policy”.
Panigirtzoglou added, “We do not see the initial negative market reaction by Gold as a rejection of the ‘debasement trade’ under a Trump win. After all, Bitcoin, the other component of the ‘debasement trade’, rallied after the Trump win”.
Bitcoin’s price jumped to $76,244 on 6 November, just as election results confirmed Trump’s victory. It has since settled around $74,000.
JPMorgan’s analysts noted that how central banks, particularly China’s, manage their gold reserves will be important for gold prices through 2025.
The analysts expect that rising global tensions will push central banks, including China’s, to continue diversifying away from the US dollar, with both gold and bitcoin likely benefiting from this shift.
Pro-crypto policies expected under Trump
With Trump back in the White House, many in the crypto industry expect positive changes for cryptocurrency regulation in the United States.
Known for his support of digital assets, Trump has promised to make the US the “crypto capital of the planet” and end what he calls a “war on crypto”. He recently referred to himself as the “first Bitcoin President”.
Trump has pledged to create a “strategic Bitcoin reserve” by using bitcoin seized in enforcement actions, aiming to hold 200,000 $BTC. He also pledged to fire SEC Chair, Gary Gensler on his first day back in office, replacing him with a more crypto-friendly figure.
Gensler has been criticised by the crypto industry for his strict approach, while SEC Commissioner, Hester Peirce, known as a “crypto mom” for her supportive stance, is considered a potential replacement.
Speaking about Trump’s influence on Bitcoin’s recent high, crypto influencer, Anthony Pompliano commented, “We have the first Bitcoin President going to the White House, which is why we saw a new all-time high last night”.
Trump’s promises extend to supporting the Bitcoin mining industry in the US, aiming to make it a world leader in mining and strengthen its position in the crypto sector.
Bitcoin ETFs gain big inflows as prices rise
Bitcoin’s rally has also led to a surge in demand for Bitcoin-focused exchange-traded funds (ETFs). Recent data shows that spot Bitcoin ETFs saw net inflows of $621.9 million, one of the largest since they were launched earlier this year.
Grayscale’s Bitcoin Mini Trust experienced its second-highest inflow day with $108.8 million, and Bitwise Bitcoin ETF received $100.9 million.
However, BlackRock’s iShares Bitcoin Trust saw net outflows for a second consecutive day, with investors pulling $113.3 million.
Bloomberg analyst, Eric Balchunas, noted this trend, saying, “IBIT just had its biggest volume day ever with $4.1 billion traded. That’s more volume than stocks like Berkshire, Netflix, or Visa saw today”.
While ETF inflows have increased, they still represent a small portion of Bitcoin’s total trading volume, which reached about $76 billion on 6 November across spot, futures, and ETFs.
Ethereum ($ETH) has not kept up with Bitcoin’s recent gains, with net inflows into $ETH US spot ETFs totalling $52.3 million.
Currently, Bitcoin is trading just above $74,000, showing a 77% increase since the beginning of the year, while Ethereum sits at $2,810, up 20% year-to-date.
With Trump’s win and potential regulatory changes on the horizon, many in the industry see a promising path forward. Some analysts expect that under a Republican administration, a friendlier regulatory environment could take shape.
This could include clarity on crypto-related regulations, paving the way for stablecoin issuers, major crypto exchanges, and the broader industry to benefit from more progressive rules.
