Insights - Since the U.S. election on November 5, Bitcoin, the largest cryptocurrency, has surged approximately 28%, reaching an all-time high of $89,884 in the early hours of Tuesday, Eastern Time.
Source: TradingView
According to Deribit, investors in the options market are betting that Bitcoin could break $100,000 by year-end. Deribit reports that nearly $800 million in open interest is wagering that Bitcoin will hit $100,000 by December 27, making it the most heavily traded strike for that expiration date. Deribit estimates the probability of this trade paying off at 18.6%.
Meanwhile, Geoff Kendrick, Global Head of Digital Asset Research at Standard Chartered, is even more bullish, predicting that Bitcoin will reach $125,000 by the end of this year and could hit $200,000 by the end of 2025.
"Trump Trade"
Cryptocurrency businesses have long struggled with the lack of clear regulatory. Donald Trump promised to provide a more supportive, even friendly, regulatory environment for the crypto industry during his campaign. "That’s just shifted 180 degrees," said Matt Hougan, Chief Investment Officer of Bitwise Asset Management. “We’re now in a positive regulatory environment, we now have tailwinds from that, and that comes in the case of a market that was already in a bull market … that’s going to push us higher.”
Trump also vowed to make the U.S. the global hub for digital assets, including plans to establish a strategic Bitcoin reserve. Additionally, he pledged to dismiss SEC Chairman Gary Gensler, who has repeatedly criticized the crypto industry for being rife with fraud and misconduct.
Strong Demand for Bitcoin ETFs
BlackRock’s $35 billion iShares Bitcoin Trust set a record Thursday with nearly $1.4 billion in daily net inflows. As investors flock to what some are calling "digital gold," the fund’s total assets now exceed those of the $33 billion iShares Gold Trust.
“We believe a significant portion of the institutional market de-risked in the lead-up to the election and is now re-entering post Trump’s win, creating material buying pressure — this is likely to be ongoing for some time yet,” said Richard Galvin, founder of crypto-focused investment firm DACM.
Surge in Crypto-Related Stocks
Shares of cryptocurrency-related companies have also surged. On Monday, Bitcoin proxy company MicroStrategy jumped 26%, while U.S. crypto exchange Coinbase saw a 20% increase.
Looking ahead, Coinbase could further benefit from the new digital asset regulatory framework proposed by Republican Senator Tim Scott. With the GOP regaining control of the Senate, Scott is expected to chair the Senate Banking Committee, a development that could ease compliance requirements for crypto trading and custody platforms.
"I think it increases the chances that other nation states buy bitcoin in a bid to front run the U.S.," said Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital. "Additionally I think it would be a crazy catalyst for the U.S. listed Bitcoin miners ... given possibilities of such entities getting nationalized."
On Monday, crypto miners MARA Holdings and Riot Platforms surged 30% and 17%, respectively.
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