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Bitcoin surged past the $80,000 mark on Sunday, reaching a new all-time high as optimism grows around President-elect Donald Trump’s pro-crypto stance.

Trump’s victory and the Republican-controlled Senate and near-majority House have fueled bullish sentiment in digital asset markets, pushing the cryptocurrency up as much as 4.7% to $80,092.

The President-elect has signaled his support for digital assets, promising to position the United States as a leader in the crypto industry.

During his campaign, he proposed creating a strategic Bitcoin reserve and vowed to appoint regulators with a favorable view of digital currencies.

Bitcoin rallies on pro-crypto policies and ETF support

Bitcoin has soared nearly 91% in 2024, driven by growing demand for U.S. Bitcoin exchange-traded funds (ETFs) and Federal Reserve interest-rate cuts.

Analysts see Trump’s electoral win as a pivotal moment for the crypto market, which has seen fresh records and increased investor confidence since the election.

The surge is not only attributed to Trump’s stated plans for Bitcoin but also to massive inflows into the iShares Bitcoin Trust ETF, managed by BlackRock.

Following the election, the iShares Bitcoin Trust saw a record daily net inflow of $1.4 billion on Thursday, with trading volume reaching its highest level on Wednesday.

This inflow, industry experts believe, highlights the influence of pro-crypto sentiments under the incoming administration.

Le Shi, managing director at Hong Kong-based market-making firm Auros, noted the immediate market response:

 

With the dust from Trump’s victory still settling, it was only a matter of time before a run-up of some sort occurred given the perception of Trump being pro-crypto, and that’s what we’re seeing now.

New Congress may ease crypto regulation

The 2024 election marked a significant shift in Washington’s stance toward digital assets.

Under the Biden administration, the Securities and Exchange Commission (SEC), led by Gary Gensler, took a stringent approach to regulating the crypto industry, citing frequent fraud and misconduct within the sector.

This resulted in high-profile crackdowns, most notably on Sam Bankman-Fried’s FTX exchange, which collapsed amid accusations of financial misconduct.

However, Trump’s promises for friendlier crypto policies could mark a sharp turn from the Biden-era clampdowns.

This political shift, analysts say, will encourage more capital to flow into digital assets as regulatory risks potentially ease.

Bitcoin outperforms traditional assets

Bitcoin’s performance this year has far outpaced traditional investments like stocks and gold. In the wake of Trump’s win, Bitcoin’s year-to-date gains have reached nearly 91%, as the cryptocurrency continues to attract investors seeking alternatives to conventional assets.

The iShares ETF and other Bitcoin-focused funds by prominent asset managers like BlackRock and Fidelity have been instrumental in attracting roughly $23.6 billion of net inflows in 2024, according to Bloomberg data.

Many see these ETF inflows as critical to Bitcoin’s price movement, especially given that the SEC had long resisted approving spot Bitcoin ETFs.

The approval of these funds, which began in 2023 following a pivotal court reversal, marked a major milestone for digital assets, and the launch of these ETFs remains one of the most highly anticipated events in the cryptocurrency space.

Trump’s pro-crypto stance boosts market confidence

Throughout his campaign, Trump advocated for the US to become a global crypto powerhouse, vowing to create a strategic Bitcoin reserve and appoint regulators who are sympathetic to digital currencies.

His stance won over several industry leaders and digital asset advocates, who hope this vision will boost the adoption of digital assets.

Trump’s electoral success has also been seen as a symbolic win for the crypto industry, which spent heavily on campaign contributions to back pro-crypto candidates.

Industry insiders are optimistic that Trump’s administration will advance legislation favorable to digital assets, fostering an environment that promotes innovation in the sector.

Trump’s win has also sparked a rally across the wider crypto market, with Ethereum rising 6.5% and Dogecoin, famously supported by Elon Musk, surging by 18%.

Analysts see this uptick as a reaction to both Trump’s promise of crypto-friendly policies and the broad-based shift toward a more supportive US regulatory framework for digital assets.

Market volatility and interest-rate outlook

Trump’s win has added to the already high volatility within crypto markets, with Bitcoin’s implied volatility index climbing to levels not seen since mid-2023.

Analysts note that investors are closely watching how Trump’s fiscal policies and his potential deregulation strategy could impact inflation and interest rates.

US 10-year Treasury yields spiked to 4.44%, reflecting expectations that Trump’s policies could maintain higher interest rates, at least in the short term.

Caroline Mauron, co-founder of Orbit Markets, a provider of crypto derivatives liquidity, commented on the heightened volatility:

 

The options market was signaling expected moves of about 8% in either direction the day after the vote, compared with a typical 2% rise or fall on a normal day.

This expected volatility has not deterred investors, as many see Trump’s win as a catalyst for long-term growth in the digital asset space.

Outlook for crypto under Trump administration

As Trump prepares to assume office, industry watchers remain optimistic that his administration could implement policies that further legitimize and support digital currencies.

Investors are keenly awaiting details of Trump’s plans for a “Bitcoin reserve,” a move that could provide a more stable foundation for the cryptocurrency.

With the Republican-controlled Congress likely to push for more accommodating crypto legislation, market participants are hopeful that Trump’s term will encourage mainstream adoption and integrate digital assets more deeply into the US economy.

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