Bitcoin has soared to a record high following Donald Trump’s recent reelection, with the cryptocurrency briefly hitting $89,995 early Tuesday, according to CoinDesk. By 5 p.m. ET, bitcoin stood at $88,288, marking a 27% increase over the past week. This surge is part of a larger rally across cryptocurrencies, fueled by expectations of a “crypto-friendly” approach from Trump’s incoming administration, which may offer both regulatory clarity and flexibility.
Trump’s Crypto Embrace and Market Reaction
In a surprising turn, Trump has shifted from crypto skeptic to crypto champion, pledging to make the U.S. the “crypto capital of the planet.” His campaign accepted bitcoin donations, and he even launched World Liberty Financial, a new family venture in crypto trading. Crypto enthusiasts now hope his leadership will push for regulatory changes, including the potential ousting of SEC Chair Gary Gensler, who has spearheaded crypto oversight.
Analysts point to Trump’s stance as the primary catalyst behind the recent rally. “Crypto rallied as Election Day progressed,” Citi analysts David Glass and Alex Saunders wrote, noting that Trump’s victory triggered “crypto-friendly” sentiments across the industry.
Factors Propelling Bitcoin and Crypto Higher
Bitcoin’s latest rise is not solely linked to the election. The recent approval of spot bitcoin ETFs has driven major inflows into the asset, offering a new investment vehicle that’s attracted institutional and retail investors alike. April also saw bitcoin’s fourth “halving,” a preplanned reduction in new bitcoin creation, which many believe contributes to price spikes by limiting supply.
Crypto’s Volatility: Big Gains, Bigger Risks
Bitcoin’s price history is notoriously volatile. Just a few years ago, bitcoin dropped from $69,000 in late 2021 to under $17,000 by early 2022, a period marked by rate hikes and the collapse of FTX. Despite its current highs, experts warn that crypto investments are still risky. “Investors should only dabble in crypto with money they’re prepared to lose,” advised Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The Environmental Question: Crypto’s Carbon Cost
Crypto mining — the energy-intensive process that produces bitcoin — has raised concerns due to its environmental impact. Studies show that bitcoin mining emissions in 2020-2021 were equivalent to burning 84 billion pounds of coal. Although some miners have shifted to cleaner energy sources, the industry’s carbon footprint remains a topic of heated debate, with calls for stronger environmental protections gaining momentum worldwide.
