Crypto and Tesla rise in ‘Trump trades’ frenzy: Bitcoin tipped to reach $100,000 at inauguration
Bitcoin could be worth $100,000 in January as crypto investors pile in thanks to Donald Trump’s resounding election victory.
The digital currency hit an all-time high yesterday, rising above $85,000 for the first time as a wave of ‘Trump trades’ erupted across global markets.
The US dollar also rose and shares in electric car maker Tesla, whose boss Elon Musk is a close ally of the incoming president, rose almost 7 percent.
Driving force: Shares in electric car manufacturer Tesla, whose boss Elon Musk is a close ally of new President Donald Trump (photo), rose by almost 10%
Tesla has gained about 40 percent since last week’s US elections and bitcoin has risen 25 percent.
“People are eager to get into the Trump trade sooner or later,” said Emmanuel Cau, head of European equity strategy at Barclays.
Bitcoin, the world’s most valuable cryptocurrency, has soared as investors bet Trump will be friendlier to the digital money sector than his predecessor Joe Biden.
Trump has previously insisted he will make the US “the crypto capital of the planet” and has floated the idea of creating a strategic bitcoin reserve for the government.
In addition, the president-elect has pledged to fire Gary Gensler, the head of the U.S. financial watchdog who has led a years-long crackdown on the industry.
Fadi Aboualfa, head of research at digital asset firm Copper.co, said a Bitcoin price of $100,000 at Trump’s inauguration on January 20 was “very possible.”
Nigel Green, boss of investment firm deVere, said: “This is the most significant tailwind we’ve seen since bitcoin’s inception.”
Trump’s victory has similarly given momentum to other major digital currencies, with ethereum up 32 percent since last week’s election and dogecoin, a joke cryptocurrency previously promoted by Musk, up 83 percent.
The boom has been so strong that the cryptocurrency sector is now worth an estimated £2.2 trillion, more than the market capitalization of the entire FTSE 100 of just over £2 trillion.
In addition to the renewed rise in bitcoin prices, the US dollar reached its highest value in four months as traders bet on an economic boom due to widely expected tax cuts and deregulation by the incoming Republican administration.
The party has also taken control of the Senate and may be on the verge of taking over the House of Representatives, giving it control over all major branches of government.
Stock markets have also rallied strongly on hopes for tax cuts and deregulation, with the S&P 500, the Dow Jones Industrial Average and the tech-heavy Nasdaq all at record highs.
Tesla shares are rising on hopes that Musk, who has spent tens of millions of dollars supporting Trump’s re-election bid and also appeared at his campaign rallies, will be repaid for his loyalty.
That could influence decisions about the electric vehicle market, as well as the regulation of areas such as cryptocurrency and artificial intelligence (AI).
Tesla’s latest leap means 53-year-old Musk has added £27.6 billion to his fortune since the election, while the company’s market capitalization has soared past £777 billion ($1 trillion).
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