Donald Trump’s Election as President: A Strong Rebound for the Crypto Market

Following Donald Trump’s victory in the U.S. presidential election, crypto assets surged rapidly, with Bitcoin (BTC) breaking through $76,000 for the first time, setting a new historical high. The market is generally optimistic about Trump’s election, believing it will create a more favorable environment for digital assets in the world’s largest economy.

Strong Performance of Bitcoin and Ethereum

During the U.S. trading day, the price of Bitcoin reached 76,330,increasingby9.576,330,increasingby9.52,700, with an increase of 11%. The CoinDesk 20 index rose overall by 10.7%, with particularly strong performances from projects such as the decentralized exchange Uniswap (UNI), Layer-1 blockchain Solana (SOL), and decentralized GPU rendering platform Render (RNDR).

Volatility and Liquidation in the Crypto Market

The explosive rise in the crypto market resulted in approximately 592 million in leveraged derivative positions being liquidated, with 3.9 million of these liquidations primarily coming from short positions betting on price declines.

resulting in the largest short squeeze in the past six months. This phenomenon shows a dramatic shift in market sentiment, with investors’ expectations for the future significantly improving.

Synchronization of Crypto Stocks’ Gains

Crypto-related stocks also increased, particularly cryptocurrency exchange Coinbase (COIN), which rose by 31%. Bitcoin mining companies such as Riot Platforms (RIOT), TeraWulf (WULF), and CleanSpark (CLSK) also experienced gains of 20% to 25%. This occurred on a day of risk appetite, with the Nasdaq and S&P 500 indexes rising by 3% and 2.5%, respectively, reflecting positive market reactions to Trump’s victory.

Impact of the Political Environment on the Crypto Industry

Market participants are betting on the blockchain prediction platform Polymarket, forecasting that the Republican Party is likely to win control of both houses of Congress, which observers view as a more favorable signal for the crypto industry. David Lawant, research director at FalconX, stated in a report on Wednesday,

“It’s hard to imagine a better outcome for the industry from the election; expectations for key regulatory improvements may gradually build over the coming months and quarters.” He pointed out that this clarity could pave the way for more crypto ETFs covering major crypto assets and even broader crypto indices, instilling greater confidence in entrepreneurs and investors regarding token issuance in the U.S.

Short-Term Risks and Market Outlook

Despite the optimistic outlook, Lawant also warned of potential short-term risks, including “last-minute enforcement actions by outgoing officials.” The new high for Bitcoin marks a breakthrough after an eight-month consolidation period, and analysts believe this leading crypto asset may have further upside ahead. Notable multi-asset trader Bob Loukas stated, “After the election, any reasons cease to exist; Bitcoin will be all in for the next 9 to 12 months.”

Key Future Events

With the election concluded, the next key event on the market’s radar is the Federal Open Market Committee meeting on Thursday, where market participants broadly expect policymakers to lower the federal funds rate by 25 basis points. This policy change could further impact market sentiment and the performance of crypto assets.