• The total cryptocurrency market capitalization has surged to a five-month high above $2.47 trillion.
• The recent gains came as traders bought into Trump’s election win.

The cryptocurrency market continues to make significant gains this week given that in just 24 hours, the total market capitalization has increased by more than $231 billion.

At press time, the market capp stood at $2.47 trillion, its highest level since June, as Bitcoin [BTC] and most altcoins edged higher. 

The widespread gains were accompanied by rising volatility that caused massive liquidations in the derivatives market per Coinglass. In the past 24 hours, more than $380 million was liquidated from the cryptocurrency market, with short sellers taking the biggest blow. 

Out of these liquidations, $234 million were short positions while $169 million were long positions. Bitcoin had the highest liquidations of $150 million followed by Ethereum [ETH] with $64 million in liquidated positions. 

The crypto fear and greed index has also risen to 77, showing “extreme greed.” So, what is driving this renewed investor confidence, and will the momentum continue?

US election pump 

The US Presidential election is the main factor fueling these gains. Pro-crypto candidate Donald Trump won by a landslide and he is now the President-elect. 

Trump has made many promises to the US crypto community including establishing a Bitcoin strategic reserve and firing the Chair of the US Securities and Exchange Commission (SEC) Gary Gensler. 

The community is already banking on these promises being fulfilled. Ripple CEO Brad Garlinghouse, has opined that during his first 100 days, Trump should change the SEC leadership, push for a pro-crypto bill, and provide clarity on Ethereum’s status as a non-security. 

Gemini co-founder Cameron Winklevoss also believes that over the next four years, the crypto industry will have more room for growth with friendly policies. 

“Imagine how much we are going to accomplish in the next 4 years now that the crypto industry won’t be hemorrhaging billions on legal fees fighting the SEC,” Winklevoss stated. 

Gemini co-founders had donated $2 million to the Trump campaign. 

The optimism around a crypto-friendly SEC, Senate, and White House is driving the bullish sentiment in the crypto industry. 

Inflows to crypto ETFs soar 

On the election day, there was also a sudden surge in activity around US-listed crypto exchange-traded funds (ETFs). Data from SoSoValue showed that the total volumes traded for Bitcoin ETFs hit $6.07 billion, the highest level since March. 

The total inflows to Bitcoin ETFs during the day also reached $621 million, marking the highest level in one week. 

Ethereum ETFs also had their best day since September with $52 million inflows. The positive data saw ETH jump to a two-month high above $2,800. 

An increase in ETF inflows helps to drive demand for the underlying product. If strong inflows continue, Bitcoin and Ethereum could trend higher. 

Crypto stocks are also rising 

The bullish wave across the cryptocurrency market has also boded well for crypto stocks. On Wednesday, Coinbase (COIN) gained by 31% to $254, its highest level since July. 

MicroStrategy also saw a 13% gain and traded at $257 by market close. MSTR has been one of the best-performing crypto stocks this year with year-to-date gains of 276%. 

Jack Dorsey’s Block also saw its stock surge to a 6-month high after a 7% gain, while Bitcoin mining company MARA Holdings posted an 18% stock gain.