"Trump Trade" Returns: Bitcoin Hits New High, Tesla Market Cap Reaches $1 Trillion Again

"Trump Trade" Returns: Bitcoin Hits New High, Tesla Market Cap Reaches $1 Trillion AgainBitcoin briefly topped $77,000 around 3:45 AM Beijing time today, setting a new all-time high. Bitcoin has gained nearly 10% in the past seven trading days, and its price has increased by over 70% since the beginning of the year

"Trump Trade" Returns: Bitcoin Hits New High, Tesla Market Cap Reaches $1 Trillion Again

Bitcoin briefly topped $77,000 around 3:45 AM Beijing time today, setting a new all-time high. Bitcoin has gained nearly 10% in the past seven trading days, and its price has increased by over 70% since the beginning of the year. Tesla's stock price also continued its ascent, closing up 8% on Friday, bringing its market capitalization back to $1 trillion. Since Trump won the US presidential election, Tesla's stock price has surged nearly 28%, increasing Musk's wealth by $50 billion to $313.7 billion, solidifying his position as the world's richest person.

Bitcoin Price Hits New High

The cryptocurrency market experienced significant fluctuations over the past 24 hours. In addition to Bitcoin, Ethereum reached a high of $2994, now settling around $2972. Other cryptocurrencies such as BNB, Dogecoin, and Cardano also followed the volatility. As of press time, the prices of most cryptocurrencies have maintained an upward trend over the past 24 hours. Bitcoin is up 0.58%, Ethereum is up over 2%, BNB is up nearly 6%, Cardano is up over 3%, and Dogecoin is up over 2%.

However, price volatility also brings risks, and many investors have been liquidated during these fluctuations. Data from Coinglass shows that 90,400 people were liquidated in the cryptocurrency market within 24 hours, resulting in a total loss of $210 million. Of this, $109 million was from long positions and $101 million from short positions.

Over the past seven trading days, cryptocurrencies have seen significant gains. Bitcoin is up nearly 10%, Ethereum is up over 19%, Solana is up nearly 20%, Dogecoin and Cardano are up over 22%, and BNB is up nearly 8%.

Nick Philpott, co-founder of digital asset broker ZodiaMarkets, said, We see the $75,000 to $80,000 range as the Bitcoin target post-Trump victory, with ETF inflows and broad crypto inflows pushing Bitcoin to $100,000 in the first quarter of next year, potentially even earlier. We also see large amounts of call options with strike prices between $80,000 and $100,000, which should further increase momentum."

BlackRock Bitcoin Fund Soars

Geoff Kendrick, global head of digital asset research at Standard Chartered Bank, said in a briefing that Bitcoin's price will reach $125,000 by the end of this year and $200,000 by the end of 2025 after Trump's victory. Kendrick believes that Trump's previous promises on cryptocurrencies, such as firing Securities and Exchange Commission Chairman Gary Gensler, establishing a national strategic Bitcoin reserve, and transforming the US into a "Bitcoin superpower," will drive Bitcoin's rise.

Kendrick mentioned, "From Bitcoin options trading, Standard Chartered Bank has observed that many investors are interested in prices around $80,000, suggesting that the cryptocurrency will reach this level "within the next week or two."

Regarding regulation, Kendrick stated that he expects Trump to overturn Biden's veto of Staff Accounting Bulletin 121 (SAB 121), a controversial SEC accounting guideline that critics argue prevents investment banks from providing large-scale cryptocurrency custody services. Kendrick believes this will happen soon after Trump takes office on January 20 next year and that this move will encourage more institutional adoption of cryptocurrencies.

It's noteworthy that BlackRock's Bitcoin fund has recently surpassed its flagship gold fund in terms of size. Data compiled by Bloomberg shows that BlackRock's Bitcoin fund, IBIT, saw net subscriptions of $1.1 billion on Thursday, bringing the fund's total assets to $34.3 billion, exceeding the size of BlackRock's flagship gold trust fund, IAU, which remains around $33 billion. BlackRock's Bitcoin ETF launched in January this year, and this alternative asset ETF has attracted $27 billion in inflows in just nine months.

Tesla's Market Cap Returns to $1 Trillion

Since Trump won the US presidential election, Tesla's stock price has skyrocketed, closing up 8% on Friday and bringing its market capitalization back to $1 trillion, reaching $1.03 trillion. In the past three trading days, Tesla's stock price has risen nearly 28%, and Musk's wealth has increased by a staggering $50 billion to $313.7 billion.

Investors are increasingly optimistic that Trump's return to the White House will benefit Musk's companies. Tesla CEO Elon Musk has been a key ally of Trump during his campaign, contributing at least $130 million to support his campaign.

Dan Ives, an analyst at Wedbush Securities, said that the Trump administration is likely to reduce regulation on Tesla and other companies. Additionally, media sources report that Trump's team is forming a new government, and the president-elect is expected to appoint senior advisors and cabinet members from Wall Street and corporate executives. Trump has also hinted that he might tap Musk or Robert F. Kennedy Jr. to push some of his agendas.

Recently, analysts at Wedbush Securities stated that Trump's return to the White House could significantly boost Tesla's AI (artificial intelligence) ambitions, potentially unlocking "$1 trillion of incremental AI valuation" for the electric vehicle maker in the coming years. From Trump's previous statements, he has shown interest in AI and promised to increase investment in this field. The analyst described the alliance between Musk and Trump as a "major strategic bet" that could be "highly beneficial to Tesla's AI/autonomous driving story."

Besides Tesla, Dan Ives, an analyst at Wedbush Securities, also anticipates that major AI initiatives could benefit other leading technology companies, including Microsoft, Amazon, Google, and Palantir. Previously, numerous brokerage analysts had indicated that if Trump were re-elected, Tesla could potentially receive policy benefits.

Tesla's New Models and Autonomous Driving Are Anticipated

During Tesla's earnings call, Musk announced that the company will launch a more affordable new model in the first half of 2025, with a price tag below $30,000 and equipped with driverless technology. On the autonomous driving front, FSD 12.5 has been pushed to Cybertruck users, and FSD 13 is about to be released, continuing to optimize the experience. The number of miles per take-over is expected to continue to improve. For Robotaxi, Tesla expects to launch driverless ride-hailing services in Texas and California in 2025. With the combination of low-cost models and autonomous driving technology, Musk projects that Tesla's automotive production and sales volume could increase by 20% to 30% in 2025.

After the short-term sentiment surge, investors will focus on:

1. Trump's subsequent policy statements and interactions with Musk, i.e., the continuation of the "Trump Trade."

2. The fourth-quarter sales performance (whether and how they meet the guidance of at least 510,000 deliveries for the fourth quarter), i.e., a return to fundamentals.