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(Bloomberg) — A surge in Bitcoin has put the original cryptocurrency on the verge of topping a record high of almost $74,000 reached in March.
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The digital asset climbed to as high as $73,564 on Tuesday in New York before churning below $73,000 in early Asian hours on Wednesday. The rally was a tailwind for smaller tokens such as Ether and meme-crowd favorite Dogecoin.
Bitcoin is viewed by some as a so-called Trump trade because Republican presidential nominee Donald Trump embraced digital assets during campaigning. Trump is ahead in prediction markets, while polls show a neck-and-neck race against Democratic candidate Vice President Kamala Harris.
The token is continuing to “price in a Donald Trump election victory,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. Bitcoin needs a sustained break past $70,000 to boost confidence that it can rally beyond March’s record high of $73,798, he added.
Trump has vowed to make the US the crypto capital of the planet. Harris has adopted a more measured approach, pledging to support a regulatory framework for the industry. Their positions contrast with a crackdown on the sector under President Joe Biden.
Trump has also said that he would ask billionaire Elon Musk — a major donor to his campaign — to head up a push to cut government spending. The effort is nicknamed the Department of Government Efficiency, or DOGE, a reference to the Dogecoin token that Musk has embraced.
Musk’s affiliation with the Trump campaign helped to lift sentiment among traders, according to Arisa Toyosaki, co-founder of Cega, a crypto derivatives service provider.
Options traders have increased bets that Bitcoin will reach a peak of $80,000 by the end of November regardless of who wins the election. Implied volatility around Election Day on Nov. 5 is elevated. Spot-Bitcoin ETFs in the US have attracted about $3.6 billion in net inflows so far this month.
Bitcoin lately weathered scaled back bets on Federal Reserve interest-rate cuts as well as a report of greater US scrutiny of Tether, a stablecoin that acts as linchpin in crypto trading. Bitcoin has jumped approximately 73% in 2024.
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