By Dr Anandadeep Mandal
Birmingham Business School, University of Birmingham
It’s official: Bitcoin has once again broken records, shattering the $95,000 ceiling after Donald Trump’s recent presidential election win, sending shockwaves across the financial world. The surge has been nicknamed the “Trump pump,” and for a good reason. Trump’s victory is sparking dreams of deregulation among crypto enthusiasts and fuelling speculation that his administration could pave the way for broader acceptance of digital currencies. So, what’s causing Bitcoin’s latest rocket to the moon, and what could Trump’s presidency mean for the cryptocurrency landscape? Let’s dive into the market drivers, key stats, and what experts are saying about the road ahead.
Fuelling the “Trump Pump”
Bitcoin’s latest leap, marking a 39% gain since the US election, isn’t happening in a vacuum. The currency’s bullish movement seems to be fuelled by an avalanche of investor enthusiasm about Trump’s anticipated crypto-friendly policies. Analysts are already speculating about potential regulatory rollbacks, suggesting that Trump could significantly lower the hurdles for cryptocurrency exchanges, digital asset firms, and Bitcoin-based financial products like exchange-traded funds (ETFs).
Among the most eye-catching indicators of this optimism: BlackRock’s Bitcoin ETF, which saw a record-breaking $4.1 billion in inflows on election day, setting a high-water mark for institutional involvement in crypto. The moves weren’t limited to Bitcoin, either. Stablecoin inflows into major exchanges like Binance and Coinbase topped $9.3 billion in the days following Trump’s win. Historically, large stablecoin inflows signal investors preparing to buy crypto assets, pointing to strong market confidence in Bitcoin’s potential under the new administration.
A Boon for Bitcoin and Altcoins Alike
Bitcoin may be the current showstopper, but it’s not the only digital asset seeing gains. In the days after Trump’s victory, Ethereum surged by 29.3%, and Dogecoin—known for its meme-inspired origins—saw a remarkable 86% boost, trading at around $0.29 per token. Solana, another leading altcoin, shot up by 32%, reaching a market cap of approximately $102 billion. These rises highlight a belief that a Trump presidency won’t just benefit Bitcoin; it could also open doors for altcoins to gain regulatory legitimacy and further attract institutional interest.
The reasoning behind these gains is simple: if Bitcoin thrives under a more relaxed regulatory approach, altcoins could ride the coattails, creating a ripple effect across the crypto market. Trump’s reported willingness to consider a national Bitcoin reserve—a policy that would lend Bitcoin unprecedented credibility—is also fuelling speculation that the entire crypto ecosystem could gain a significant legitimacy boost.
Trump’s Crypto-Friendly Policies: What Could Change?
Trump’s first term didn’t exactly make waves in the crypto space, but his recent campaign statements signal a change in tone. Reports suggest that his administration could ease restrictions on cryptocurrency exchanges, potentially making it easier for consumers and institutions alike to engage in digital assets. The Securities and Exchange Commission (SEC) is also in the spotlight, with predictions that leadership changes might lead to more lenient oversight of cryptocurrency trading and products like Bitcoin ETFs.
This regulatory shake-up could trigger a wave of new crypto-based financial products, allowing traditional finance players to enter the market with fewer compliance hurdles. Coinbase’s CEO recently celebrated Trump’s win as a “major victory” for the cryptocurrency industry, suggesting that regulatory rollbacks might promote growth in digital finance, including decentralized finance (DeFi) solutions, blockchain-based security, and even tokenized assets.
Beyond Bitcoin: Potential Impact on Tech and Innovation
The enthusiasm for Trump’s possible crypto stance extends beyond the confines of digital currencies, potentially sparking a tech sector renaissance. Blockchain-focused companies are expected to attract increased venture capital, especially in innovative areas like DeFi, digital payments, and identity solutions based on blockchain technology. Startups specializing in blockchain infrastructure, security, and transaction solutions are likely to see interest and funding increase as the technology gains wider acceptance.
A favourable U.S. stance on crypto could also make blockchain technology more mainstream, opening doors for various industries—such as supply chain logistics, healthcare, and voting systems—to embrace blockchain solutions. This could further drive innovation, making blockchain a fundamental technology for the next era of the internet.
The Risks: What Could Go Wrong?
Not everyone is convinced that the “Trump pump” will lead to sustained gains. While Bitcoin and its compatriots are having their moment, some market analysts are waving caution flags, reminding investors that cryptocurrency markets are notoriously volatile. Bitcoin’s own history includes numerous rapid declines, including a 20% plunge in 2021 following a crackdown on crypto mining in China.
Critics also warn that the euphoria around Trump’s crypto stance could lead to speculative bubbles. If policies don’t match the hype, or if increased adoption results in financial crimes or money laundering concerns, regulatory bodies may react with stricter oversight. While Trump may be favouring crypto now, a market scandal or economic downturn could quickly sour the administration’s attitude toward digital assets, leading to a crackdown instead of the expected crypto spring.
What’s Next for Bitcoin and the Crypto Market?
Market projections are, unsurprisingly, optimistic. Several analysts predict Bitcoin could reach $100,000, driven by heightened institutional interest and a favourable U.S. administration. History supports the bullish outlook: after the first Bitcoin futures ETFs were approved in 2021, Bitcoin’s price shot up over 50% within two months. If Trump’s policies follow through on their crypto-friendly promises, Bitcoin could very well-set new records in the coming months.
Bloomberg Intelligence’s forecast aligns with this sentiment, pointing to Bitcoin’s growing potential as an institutional-grade asset. BlackRock’s iShares Bitcoin Trust trading volumes reportedly surpassed those of major companies like Netflix and Berkshire Hathaway on election day—a telling sign that Bitcoin is inching toward mainstream acceptance in high-stakes portfolios.
In Summary: Can the “Trump Pump” Sustain Bitcoin’s Rise?
Bitcoin’s recent surge past $90,000 has placed it firmly in the spotlight, with the crypto community brimming with hope and speculation over Trump’s impact on the industry. The influx of stablecoins, record ETF inflows, and gains across the board reflect a market eager for Trump’s rumoured deregulation. If the new administration indeed ushers in a friendlier regulatory environment, Bitcoin could be on a path to shatter its previous records, potentially soaring past $100,000.
Yet, as always, volatility is crypto’s constant companion, and the market will be watching closely to see if the Trump administration follows through. For now, though, investors are soaking up the gains, optimistic that the “Trump pump” will carry the market to new heights soon.
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The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.