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The stories that matter on money and politics in the race for the White House
Bitcoin surged on Monday following an assassination attempt on Donald Trump as traders increased their bets on the former president winning November’s US presidential election.
The price of bitcoin rose more than 10 per cent to $63,595, its highest level in two weeks, after Trump was injured in the ear during an assassination attempt by a gunman at a campaign rally at the weekend. The Republican is seen as the more pro-crypto candidate, having hosted industry executives at Mar-a-Lago and voiced enthusiasm for US-based bitcoin mining.
Trump’s campaign has also accepted cryptocurrency payments, a first for a major US political party, raising hopes of a departure from the US regulatory crackdown on the industry seen in recent years.
“The probability of a Donald Trump victory has increased significantly,” said Grzegorz Dróżdż, market analyst at currency company Conotoxia, adding that a Trump presidency would “positively impact” crypto.
The implied odds of Trump winning in November jumped shortly after the shooting, according to live trading on political betting site PredictIt.
Shares in Trump’s Truth Social media company closed 31 per cent higher. Trump Media & Technology Group, which reported a $98mn operating loss for the three months to March 31, was taken public that month in a merger with a blank-cheque company and recently rallied ahead of the debate between Trump and President Joe Biden last month.
Prison operators gained, with Geo Group shares closing up almost 10 per cent and CoreCivic adding 8 per cent. Shares in US gun makers also surged. Sturm Ruger & Co gained as much as 12 per cent while Smith & Wesson Brands rose as much as 14.3 per cent.
“For prison stocks, the expectation is that if Trump wins he’ll get stricter on the border and those companies will benefit,” said Michael O’Rourke, chief market strategist at JonesTrading, who was less convinced guns were a clear Trump-related trade. “Gun stocks always have volatility around the election cycle and it usually winds up being simply a lot of noise in the market.”
The S&P 500 closed 0.3 per cent higher on the day, though just short of a new record high.
“A presidential candidate surviving an assassination attempt is good news in itself so [Monday] has been a fair reaction,” O’Rourke continued. “But I don’t think stocks are going to go on a multi- percentage point run here just because Trump is now favourite to win the election by a larger margin than before.”
The shortening odds on a second Trump presidency did, however, send ripples across broader financial markets. US Treasury yields edged higher in a more muted version of the reaction that followed Biden’s disastrous debate performance.
Many investors believe Trump’s tax-cutting policies would drive up deficits and inflation, hitting US Treasuries and sending yields higher in a similar pattern to the aftermath of his election win in 2016.
The US dollar index, which tracks the greenback against a basket of six other major currencies, was steady, having weakened in July as traders have raised their bets on a September interest rate cut from the Federal Reserve.
Yields on benchmark 10-year Treasuries rose 0.04 percentage points to 4.22 per cent, reflecting a small decline in price.
Monday’s moves “chime[s] with the Trumpian theme given the popular narrative of his being good for business and . . . his pro-crypto stance”, said Rabobank analysts in a note to clients.
“For the markets, the complexities of the US political backdrop have been boiled down to the assumption that the weekend events will lead to an increased chance of Trump winning the November presidential election,” they added.