Bitcoin Nears $90,000 as Crypto Market Exceeds Pandemic-Era Peak

11/13/2024 04:37
Bitcoin Nears $90,000 as Crypto Market Exceeds Pandemic-Era Peak

(Bloomberg) -- Bitcoin’s chartbusting rally took the digital asset to almost $90,000 for the first time and lifted the overall value of the crypto market above its pandemic-era peak as traders bet on a boom under President-elect Donald Trump.Most Read from BloombergThe Leaf Blowers Will Not Go QuietlyUnder Trump, Prepare for New US Transportation PrioritiesArizona Elections Signal Robust Immigration Enforcement Under TrumpScoring an Architectural Breakthrough in Denver’s RiNo DistrictThe largest

(Bloomberg) -- Bitcoin’s chartbusting rally took the digital asset to almost $90,000 for the first time and lifted the overall value of the crypto market above its pandemic-era peak as traders bet on a boom under President-elect Donald Trump.

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The largest digital currency has jumped about 33% since the US election on Nov. 5, hitting an all-time high of $89,968.10 on Tuesday, based on a benchmark of composite prices tracked by Bloomberg. On some exchanges such as Coinbase, and broker platforms like Galaxy Digital’s, the price did briefly exceed $90,000. Smaller tokens such as Dogecoin and shares of crypto-related companies like MicroStrategy Inc. also extended their record-breaking gains.

“Post-election, cryptocurrencies have seen gains as potential pro-investment economic policies and regulatory clarity bolster investor confidence and liquidity,” said Brian Strugats, head of spot trading at the crypto prime broker FalconX. “With institutional adoption accelerating and global markets eyeing crypto for diversification, the influx of capital is likely to grow.”

Trump has vowed friendlier crypto rules and his Republican Party is tightening its grip on Congress, boosting his odds of pushing through his agenda. Trump’s other pledges include setting up a strategic Bitcoin stockpile and fostering domestic mining of the token to make the US the crypto capital of the planet.

His stance is a sharp break from a Securities & Exchange Commission crackdown on the divisive industry under President Joe Biden. The change of tone has energized speculative buying of large and small tokens alike, raising the value of digital assets overall to about $3.1 trillion, CoinGecko data show.

‘Red-Hot’ Play

Bitcoin is in “beast mode,” Chris Weston, head of research at Pepperstone Group, wrote in a note. “The question for traders not already set is whether there is still room to chase this red-hot play or wait for a slight retracement and for some of the heat to come out of the impulsive trend.”

Investors are lining up bets in the options market that Bitcoin will pass $100,000 as soon as the end of the year, according to data from the Deribit exchange. Open interest — or outstanding contracts — for CME Group Inc. futures for Bitcoin and second-ranked Ether scaled records on Monday, a sign of growing engagement by US institutional investors.

“Definitely feels like we’re in price discovery with some really solid ‘real money flows’ coming from the ETFs,” said Jake Ostrovskis, an over-the-counter trader at crypto market maker Wintermute. “There’s a consensus that $100k by December is a likely target - lots of call options at that strike/tenor.”

Meanwhile, software firm MicroStrategy — the largest publicly-traded corporate holder of Bitcoin outside the exchange-traded fund sector — bought about 27,200 Bitcoin for some $2 billion between Oct. 31 and Nov. 10. Shares of MicroStrategy are up over 50% to an all-time high since the election.

Traders for now are paying little heed to questions such as how quickly Trump will implement his agenda or whether a strategic stockpile is a realistic step. The febrile mood is illustrated by a recent doubling in the price of Dogecoin, a meme-crowd favorite promoted by Trump supporter Elon Musk.

Stretched Rally

Bitcoin is up roughly 110% in 2024, helped by robust demand for dedicated US ETFs and interest-rate cuts by the Federal Reserve. The token’s rise exceeds the returns from the likes of global stocks and gold. Turnover in BlackRock Inc.’s $39 billion iShares Bitcoin Trust reached an all-time high on Monday.

Fairlead Strategies LLC technical analyst Katie Stockton in her latest research note said “it would be natural to see a period of digestion after such a steep run-up” in Bitcoin, recommending a “short-term neutral bias.”

Digital-asset companies spent heavily during the US election campaign to boost candidates viewed as favorable to their interests. Against that backdrop, Trump did an about-face, becoming a supporter of an industry he once labeled a scam.

His backing turned Bitcoin into one of a range of so-called Trump trades. Others include US stocks and the dollar, both of which have also been advancing given Trump’s focus on domestic economic growth, tax cuts and protectionist tariffs.

--With assistance from Muyao Shen and David Pan.

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