Bitcoin prices jumped past $71,000 for the first time since June on Tuesday, boosted by inflows into dedicated exchange-traded funds and speculation about the US Presidential Election next week.
The largest digital asset, Bitcoin was up 5% at $71,020. Bitcoin prices hit an all-time high of $73,750 in March and have jumped 70% in 2024. Other cryptocurrencies also gained, with the second-ranked Ethereum price rising 5.5%, Dogecoin surging 15%, Solana up 4% and BNB up 3.3%, as per Coinmarketcap data.
Gains in Bitcoin prices come as traders view the cryptocurrency as a so-called Trump trade because Republican presidential nominee Donald Trump embraced digital assets during campaigning.
Trump is ahead in prediction markets, while polls show a neck-and-neck race against Democratic candidate Vice President Kamala Harris, Bloomberg reported.
Cryptocurrency prices have been rallying ahead of the US Presidential Election 2024 amid optimism over potential softer regulations for cryptocurrencies after the election results.
While Donald Trump is openly supportive of cryptocurrencies and has vowed to make the US the crypto capital of the planet, his Democratic opponent Kamala Harris, has adopted a more measured approach and promised to establish a clear regulatory framework for the cryptocurrency industry.
Trump has stated that he would approach billionaire Elon Musk — a key donor to his campaign — to lead an initiative focused on reducing government spending. This effort is informally named the Department of Government Efficiency (DOGE), referencing the Dogecoin token that Musk has actively supported, Bloomberg reported.
Options traders have increased bets that Bitcoin will reach a peak of $80,000 by the end of November regardless of who wins the election, Bloomberg reported. Implied volatility around Election Day on November 5 is elevated.
Bitcoin ETF Inflows
Bitcoin prices have been buoyed by significant inflows into Bitcoin Exchange-Traded Funds (ETFs). Spot Bitcoin ETFs in the US have attracted approximately $3.3 billion in net inflows this month, Bloomberg reported.
This surge in demand is partly driven by expectations of more favorable US crypto regulations following the November 5 election. Increased ETF interest has contributed to Bitcoin reaching a record high in March this year.
(With inputs from Bloomberg)