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The price of bitcoin hit a new record on Tuesday, marking the third consecutive day that the cryptocurrency has reached an all-time-high.
The new price high above $89,900 forms part of a broader rally that began when Donald Trump emerged as the likely winner of the US presidential election on 6 November.
Positioning himself as a pro-crypto candidate, the president-elect has promised to end what he calls the “persecution” of the crypto industry and to position the United States as the “bitcoin superpower of the world” once in power.
“Today’s all-time high, driven by Trump’s election win, signals that we are in the midst of a potential paradigm shift into the next phase of growth for crypto,” Lennix Lai, the chief commercial officer of the crypto exchange OKX, told The Independent.
“As a candidate, Trump sent very bullish signals to the market about embracing the crypto industry and strengthening the United States’ status as a global, regulated crypto hub. If implemented, this will have broad repercussions globally.”
Mr Lai also warned that there would likely be some short-term volatility for the crypto market in the fallout from Trump’s victory, with the risk of some “retrenchments on the way to further all-time highs” likely.
Other industry figures believe the 20 per cent price rise over the last week is not solely due to Trump’s victory, with the rally following months of positive momentum for the crypto market.
“Trump was just the icing on the crypto cake,” said James Toledano, the chief operating officer at the crypto firm Unity Wallet.
“I strongly believe that the price surge reflects a multitude of other factors beyond just Trump, including the evolving market maturity of cryptocurrency and increased institutional involvement.”
Mr Toledano pointed to two non-political events this year that laid the foundation for the recent price gains: the approval of the first ever spot bitcoin exchange-traded funds in January; and the bitcoin ‘halving’ event in April that saw the supply of new bitcoins from mining slashed by 50 per cent
This combination of increased demand from a new wave of institutional investors, together with a sudden decrease in supply, provided the basis for the record-breaking rally.
“The ‘Trump-bump’ we have experienced in this last week is very real – but it didn’t happen in a vacuum,” Mr Toledano added.
“Many elements have coalesced and accreted to contribute to a multi-faceted rally of bitcoin this year beyond political sentiment in and of itself.”
