(Bloomberg) — Bitcoin’s rally has put the yuan cryptocurrency on the brink of surpassing its all-time high of about $74,000 hit in March.
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The digital asset rose as high as $73,564 in New York on Tuesday, but fell below $73,000 by early Asian time on Wednesday. This rally has been a tailwind for smaller tokens such as Ether and Dogecoin, which is popular with the meme crowd.
Bitcoin is considered by some to be a so-called Trump transaction after Republican presidential candidate Donald Trump leveraged the digital asset during his campaign. Trump has the lead in prediction markets, but polls show him in a close race with Democratic nominee Vice President Kamala Harris.
IG Australia market analyst Tony Sycamore said in a note that the token “continues to price in President Donald Trump's election victory.” He added that a sustained break above $70,000 is needed to boost confidence that Bitcoin can rise above March’s all-time high of $73,798.
President Trump has vowed to make the United States the crypto capital of the planet. Harris has taken a more measured approach and pledged to support the industry's regulatory framework. Their position stands in contrast to the crackdown on the sector under President Joe Biden.
Trump also said he would ask billionaire Elon Musk, a major donor to his campaign, to lead a push to cut government spending. The initiative is nicknamed the Department of Government Efficiency (DOGE), after the Dogecoin token that Musk adopted.
Arisa Toyosaki, co-founder of crypto derivatives service provider Seaga, said Musk's involvement in the Trump campaign helped boost sentiment among traders.
Option traders are increasingly betting that Bitcoin will reach a high of $80,000 by the end of November, no matter who wins the election. Implied volatility around Election Day on November 5th is rising. The US Spot Bitcoin ETF has attracted about $3.6 billion in net inflows so far this month.
Bitcoin has recently weathered reports of scaling back bets that the US Federal Reserve will cut interest rates and increased US scrutiny of Tether, the stablecoin that is the cornerstone of cryptocurrency trading. Bitcoin rose about 73% in 2024.
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