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

by Alice
Cryptocurrency8

Bitcoin (BTC-USD) has surged past $89,000, reaching new all-time highs and pushing the overall value of the crypto market beyond its peak during the pandemic. Traders are betting on a boom in the market under the upcoming presidency of Donald Trump.

Since the US election on November 5, Bitcoin has risen by about 32%, reaching a record high of $89,599 on Tuesday. At 5:45 a.m. in London, Bitcoin was trading at $88,450.

Trump’s Impact on the Crypto Market

Trump has promised to implement friendlier crypto regulations, and with his party gaining more influence in Congress, his chances of pushing his agenda are growing. Key proposals from Trump include establishing a strategic Bitcoin reserve and promoting domestic mining to make the US the “crypto capital of the planet.”

This marks a sharp shift from the stance of the Biden administration, which had been cracking down on the crypto industry. The new tone has sparked increased speculative buying across a variety of digital tokens, driving the total value of the cryptocurrency market to approximately $3.1 trillion, according to CoinGecko.

Speculative Buying and Market Sentiment

Bitcoin’s current performance has been described as being in “beast mode” by Chris Weston, head of research at Pepperstone Group. He noted that traders are now weighing whether to chase the rally or wait for a slight pullback as the market trend shows signs of overextension.

Investor confidence is also evident in the options market, where many are betting that Bitcoin will surpass $100,000 by the end of the year, according to data from the Deribit exchange. Additionally, the open interest for Bitcoin futures contracts on CME Group Inc. and for Ether (ETH-USD) hit record highs, signaling increasing interest from US institutional investors.

Meanwhile, MicroStrategy Inc. (MSTR), the largest publicly traded corporate holder of Bitcoin outside of the ETF sector, purchased about 27,200 Bitcoin for approximately $2 billion between October 31 and November 10.

The Crypto Rally Continues

At the moment, traders are focused on the ongoing rally, paying little attention to questions about how quickly Trump will implement his crypto policies or whether a Bitcoin stockpile is feasible. This fervent market atmosphere is highlighted by the dramatic rise in the price of Dogecoin (DOGE-USD), a cryptocurrency promoted by Trump supporter Elon Musk.

Bitcoin has increased by roughly 110% in 2024, driven by strong demand for Bitcoin-focused US ETFs and interest rate cuts by the Federal Reserve. This rise has outpaced the returns of global stocks and gold. In fact, turnover in BlackRock’s $39 billion iShares Bitcoin Trust (IBIT) reached an all-time high on Monday.

Potential Pause in the Rally

Despite the surge, some analysts predict that Bitcoin could experience a period of consolidation. Katie Stockton, a technical analyst at Fairlead Strategies, suggested that a “short-term neutral bias” might be appropriate after such a rapid increase. A natural digestion period for the market may follow the steep run-up.

During the US election campaign, digital-asset companies spent heavily to support candidates favorable to the crypto industry. Trump, who once criticized cryptocurrencies as a scam, has now turned into a major supporter of the market. His backing of Bitcoin has made it a key part of the broader “Trump trades,” alongside US stocks and the dollar, both of which have seen gains thanks to his focus on domestic economic growth, tax cuts, and protectionist policies.

Related topics:

You may also like

FinancialFocusHub.com is your gateway to insightful financial guidance and strategies. Explore expert advice on investing, saving, and managing wealth. Stay informed with the latest trends and tools to empower your financial journey.

TAGS

Copyright © 2024 Financialfocushub.com