Trump's Return Ignites Bitcoin's Surge: A New Bull Run for Crypto Market?

Trump's Return Ignites Bitcoin's Surge: A New Bull Run for Crypto Market?Following Trump's victory, Bitcoin experienced a significant surge. On November 12th, the price of Bitcoin soared to nearly $90,000, setting a new all-time high

Trump's Return Ignites Bitcoin's Surge: A New Bull Run for Crypto Market?

Following Trump's victory, Bitcoin experienced a significant surge. On November 12th, the price of Bitcoin soared to nearly $90,000, setting a new all-time high. As the price surged, Bitcoin's market cap surpassed that of silver, making it the eighth largest asset in the world. Meanwhile, the overall cryptocurrency market witnessed a rise, with the total market cap exceeding its previous all-time high of $3.1 trillion from November 2021. The bullish sentiment in the market remains strong, and analysts predict further upward potential. Analysts believe that the "Trump Trade" is beginning to deliver on its promise. Despite regulatory risks and market volatility, the long-term investment value of Bitcoin remains positive. The relaxation of regulatory policies in the U.S. could bring about a new wave of bullish sentiment to the crypto market.

Bitcoin Nears $90,000 Milestone

Bitcoin's gains continued in the past two days after breaking the $80,000 mark. On November 11th, Bitcoin climbed from $80,000 to around $84,000. On the morning of November 12th, OKX data showed Bitcoin surging past $89,000, nearing $90,000, with a 24-hour increase of 11.52% and reaching a new all-time high.

Beyond Bitcoin, the entire cryptocurrency market also saw an upswing. Ethereum climbed past $3345, reaching its highest point since late July. Dogecoin (DOGE) saw a 19.57% increase, CRO rose by 33.99% within the day, and WLD experienced a 27.57% intraday jump.

Simultaneously, crypto-related stocks opened higher across the board. As of press time, BlueFocus Interactive (08267.HK) was up 27.94%, OKEx Technology Group (01499.HK) rose 16.50%, New Huo Technology Holdings (01611.HK) gained 15.38%, OSL Group (00863.HK) increased 13.91%, Boyaa Interactive (00434.HK) climbed 14.73%, and Xiong'an Technology (01647.HK) rose 10.24%. Hong Kong's cryptocurrency spot ETFs also saw a collective rise. As of press time, Bosera Bitcoin was up nearly 15%, Huaxia Bitcoin rose more than 10%, Huaxia Ethereum gained over 4%, and GF Securities Ethereum increased by over 3%.

Trump's "Bitcoin" Promise Ignites Market Expectations

Trump's victory in the US election, having frequently released signals favorable to cryptocurrency, is considered one of the catalysts behind this market surge. During his campaign, Trump not only publicly endorsed crypto assets but also became the first candidate to accept donations in cryptocurrency. Gemini co-founders, Sequoia Capital partners, Kraken co-founders, Ripple's Chief Legal Officer, and BitGo CEO were among those who donated to Trump's campaign.

"I will be the most pro-innovation and pro-Bitcoin president in the history of the United States," Trump declared at the 2024 Bitcoin conference. He promises to ensure the US becomes a global center for cryptocurrencies and a Bitcoin superpower. If he returns to the White House, he intends to include Bitcoin in the U.S. strategic reserves. Data reveals that the US government currently holds over 210,000 Bitcoins, worth approximately $14 billion. Trump previously stated that he would ensure the government keeps 100% of its Bitcoin holdings after taking office.

This move is perceived by the market as a reduction in the potential negative impact on the market from the US government selling its Bitcoin. Jeffrey Ding, Chief Analyst at HashKeyGroup, told "China Business Times" that Trump will deliver on his promise to make Bitcoin a US reserve asset. The implementation of this favorable factor would prevent the existing US cryptocurrencies from being sold on the market, significantly reducing potential bearish expectations. At the same time, Bitcoin, as a US reserve asset, could lead to government purchases. If this were to happen, it would open up new upward potential for the market.

Institutional Accumulation Fuels Bullish Sentiment

Simultaneously, institutions are accumulating Bitcoin, further intensifying bullish sentiment. MicroStrategy's founder stated on the X platform that MicroStrategy purchased 27,200 Bitcoins for $2.03 billion, at an average price of $74,463. As of November 10th, 2024, MicroStrategy's Bitcoin holdings reached 279,420 BTC. Data disclosed by Arkham on X also revealed that Tesla's Bitcoin holdings are now valued at $1 billion.

Zhao Wei, Senior Researcher at OKX Institute, shared in an interview with "China Business Times" that as one of the world's major economies, the US's economic and crypto policies are significant factors influencing the crypto market. Although Trump's return to power is viewed favorably by the market, attention should be paid to his specific crypto policies after taking office, changes in US regulatory agencies' oversight of the crypto market, the integration of the crypto market with the traditional financial system, and the potential volatility and uncertainty these factors might bring to the crypto market.

"Furthermore, beyond whether Bitcoin and the crypto market can accelerate the compliance process, the market will continue to demand greater transparency and security in cryptocurrency transactions. With ongoing technological innovation and market growth, the industry may face new opportunities and challenges," Zhao Wei noted.

Eased Regulations May Bring New Bullish Sentiment to the Crypto Market

With Bitcoin surpassing $89,000, its market cap has outpaced that of silver and the Vanguard Total Stock Market ETF, rising to eighth place in global asset market capitalization, currently sitting at approximately $1.757 trillion. Previously, regulatory forces, particularly the US Securities and Exchange Commission (SEC), implemented strict policies concerning cryptocurrency. Publicly available SEC data reveals that the agency launched 46 enforcement actions targeting the cryptocurrency sector in 2023, a 53% increase from 2022. As of the end of 2023, penalties against crypto market participants totaled approximately $2.89 billion, with $281 million coming from settlements reached that year. According to data from the Blockchain Association, US crypto companies have spent over $400 million since Gary Gensler became chair of the SEC to manage the agency's enforcement actions.

Jeffrey Ding believes that the "Trump Trade" is now starting to truly deliver on its promise, and Bitcoin still has room to rise. In terms of regulation, whoever becomes the next SEC chair, regardless of who it is, will ease regulations. The passage and implementation of the FIT21 Act may potentially open new doors for the crypto market.

NYDIG, a Bitcoin financial services and infrastructure company, also highlighted the trend of regulatory openness in a report, stating that under the new US administration, legislative proposals such as the Financial Innovation and Technology for the 21st Century (FIT21) Act and stablecoin regulations could gain support.

Web3 Industry Presents New Opportunities

Meanwhile, the market believes that the Web3 industry is set to see new opportunities for development, with technological innovation and regulatory policies shaping the future market landscape.

Zhao Wei suggests that in the new economic environment, crypto assets with strong financial attributes, like Bitcoin and stablecoins, will continue to hold a significant position in the market. These assets have transcended being mere trading tools and have become means of value storage, attracting the attention of long-term traders and institutions. In an innovation-driven market environment, they may see new development opportunities. Additionally, innovative sectors such as Web3 and decentralized finance (DeFi) will continue to lead the development of the crypto market.

"At the same time, as crypto assets become more prevalent and more users join, concern for privacy protection and security will continue to grow. Technological advancements will also continue to enhance transaction privacy and security, providing users with a more secure and reliable crypto asset experience," Zhao Wei believes.

Jeffrey Ding notes that the Republican victory will likely lead the new US government to leverage the new wave of Web3 opportunities. As Trump vigorously pushes for the reshoring of manufacturing, bolstering the real economy, the Web3 industry could potentially become a new virtual economic growth point.

Conclusion

Trump's return appears to have injected new vitality into the crypto market, with the surge in Bitcoin's price serving as a manifestation of bullish sentiment. However, the future development of the crypto market remains fraught with uncertainty, as regulatory policy adjustments, market fluctuations, and technological advancements are all factors that will influence the market trajectory. As investors chase market trends, it is crucial to maintain rationality, invest prudently, and pay attention to market changes and risk warnings.