On the morning of November 24, Bitcoin traded at over 98,000 USD, a staggering surge from its price of over 42,000 USD at the beginning of the year. Notably, in just over two weeks since November 5, when Donald Trump was elected President of the United States, the cryptocurrency has skyrocketed from around 67,000 USD to its current lofty heights.
Analysts attribute this surge, in part, to Trump’s support for digital assets during his campaign, where he pledged to transform the US into a global cryptocurrency hub and establish a national Bitcoin reserve.
Nguyen Duc Khang, Head of Analysis at Pinetree Securities, believes that the global cryptocurrency market has reacted very positively to Trump’s re-election. Essentially, any new demand from the US government, as well as supply from other governments selling their holdings, would not significantly impact the market.
Bitcoin’s price surged by approximately 46% just a few weeks after Donald Trump’s election victory. |
According to Khang, the market’s main expectation is the recognition of cryptocurrencies as a new asset class alongside traditional assets such as stocks and bonds. Despite the recent price increase of nearly 50%, the market capitalization of Bitcoin, the largest cryptocurrency, is estimated at only about 1.8 trillion USD, roughly 10% of gold’s market cap. If institutional investors were to allocate just 10% of their gold investments to Bitcoin, its market cap could double.”
Trump’s policies are seen as supportive of American businesses and open to cryptocurrencies, and both the US stock market and Bitcoin have performed well following his re-election.
Dr. Nguyen Tan Son, from RMIT University Vietnam, believes that Trump’s victory in the 2024 US presidential election could lead to fresh approaches and potentially profound changes in the global digital finance landscape.
Specifically, the new US administration is expected to create a more open environment for cryptocurrencies. A key aspect of Trump’s vision is the plan to build a federal government “Bitcoin reserve.”
“Similar to traditional assets like gold, this reserve would serve as a hedge against inflation and provide a new tool to reduce public debt. Over five years, the federal government would gradually accumulate Bitcoin up to about 5% of the total global supply, positioning the US as a strategic player in the cryptocurrency market. Trump has also proposed exempting Bitcoin transactions from capital gains tax, which could stimulate a new wave of investment from both individual and institutional investors,” said Dr. Son.
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