The price of bitcoin surpassed $100,000 for the first time on Wednesday, hitting a new high as the world’s largest cryptocurrency extended a rally sparked by the election of former President Donald Trump.
Bitcoin has soared more than 40% since Election Day, when voters opted for a candidate seen as pro-digital currency.
These gains far exceeded those of the stock market. THEThe &P 500 rose about 2.4% during that period, while the tech-heavy Nasdaq jumped 2.6%.
During the election campaign, Trump pledged to strengthen the cryptocurrency sector and ease regulations enforced by the Biden administration. Trump also promised to create the federal government’s first National Strategic Bitcoin Reserve.
Trump said he would replace Securities and Exchange Commission Chairman Gary Gensler, whom many crypto supporters dislike because of what they perceive as a robust approach to crypto regulation.
FILE – Bitcoin logos are displayed at the Inside Bitcoins conference and trade show on April 7, 2014 in New York. Bitcoin has surpassed the $100,000 mark.
AP Photo/Mark Lennihan, file
Gensler announced that he plans to resign on January 20, 2025, the date of Trump’s inauguration.
Post-election euphoria has lifted other parts of the crypto sector. Ethereum, the second largest cryptocurrency, soared 27%. The lesser-known dogecoin soared about 140%, while litecoin surged 35%.
Shares of Coinbase, a leading cryptocurrency trading platform, are up more than 70% since Trump’s re-election.
The growth in recent weeks represents a remarkable turnaround for the once-beleaguered crypto industry. The sector entered this year bruised after a series of high-profile collapses and corporate scandals.
FTX, a multibillion-dollar cryptocurrency exchange co-founded by Sam Bankman-Fried, collapsed in November 2022. The implosion sparked a 17-month legal saga that culminated in Bankman-Fried’s conviction for fraud. In April, Bankman-Fried was sentenced to 25 years in prison.
Changpeng Zhao, founder and former CEO of leading cryptocurrency exchange Binance, was sentenced to four months in prison in April after pleading guilty to charges that his platform enabled illicit financial activities.
Trump’s re-election marks the latest in a series of positive developments that have boosted cryptocurrency this year.
Those gains were spurred, in part, by the U.S. approval in January of Bitcoin ETFs, or exchange-traded funds. Bitcoin ETFs allow investors to purchase an asset that tracks the price of Bitcoin, while avoiding the hassle and risks of purchasing the crypto coin itself.
Last month, options on BlackRock’s popular iShares Bitcoin Trust ETF (IBIT) were made available for trading on Nasdaq. Options, which provide a new avenue for Bitcoin investors, allow individuals to commit to buying or selling the ETF at a given price and on a specific date. Although such investments generally involve additional risks, they can also yield significant gains.
IBIT edged up 1% on Friday, hitting a record high of around $56.
Bryan Armour, director of passive strategies research at financial firm Morningstar, attributed the recent crypto surge to investors’ anticipation of friendly politics under Trump, as well as new options available for trading cryptocurrencies. Bitcoin ETF.
Nonetheless, the performance of cryptocurrencies, including bitcoin, has proven to be volatile, Armor added. The price of bitcoin could fall, especially if Trump has difficulty fulfilling his election commitments, he said.
“As long as the narrative remains positive, there’s always room for growth,” Armor told ABC News before bitcoin hit $100,000. “I also think that campaign promises don’t always come true.”
“It’s still a very volatile asset,” Armor added.
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