Why crypto prices are surging

As the sun rose on November 6, most Australians will have been fast asleep or just beginning their days, but on the other side of the world the US election was entering its very final stages.

It's fair to say that throughout that day as the vote counting got underway, a fair number of Australians will have tuned in to the coverage of the election results, but with the exception of the most diehard enthusiasts, very few would have been thinking about cryptocurrency.

At 6am that morning the price of one Bitcoin was trading at $105,813 - roughly where it had been sitting in the days prior, and down from the heights reached in late October.

Fast forward 12 hours and the price had surged to a record high of $113,732. One week later in the early hours of November 13, one Bitcoin was trading at $135,995.

Of course, Bitcoin is not the only asset to have performed well in the past week following the US election, but the scale of the rise in the cryptocurrency's value has been considerable.

As James Quinn-Kumar, director of community engagement at cryptocurrency trading platform Binance Australia explains, the price surge has been driven by a number of factors, including the election of former president Donald Trump.

"Over recent months we have experienced Bitcoin halving, seen the approval and rapid growth of Bitcoin spot ETFs - which have become the most successful ETFs in history - and witnessed increased institutional adoption of digital currencies," he says.

"Many investors see Trump's victory as positive for cryptocurrency markets due to his previous calls for lighter regulations on digital assets.

"This expectation has increased confidence in the crypto space, adding to the bullish sentiment around Bitcoin and the possibility of a Bitcoin strategic reserve, which could lead to increased nation-state adoption."

How have crypto prices moved since Trump's election?

As the largest cryptocurrency by market capitalisation by some distance, it's unsurprising that Bitcoin dominates the news, but it's just one asset in the wider crypto universe.

Looking at the other top nine cryptocurrencies by market capitalisation though, it's clear that the recent price growth hasn't been limited to Bitcoin.

In fact, aside from stablecoins like Tether and USDC, all the major cryptocurrencies have recorded double-digit price growth - and in the case of the meme coin Dogecoin, triple-digit growth - in the week since the election.

"The recent surge has had a ripple effect on other cryptocurrencies, especially larger altcoins like Ethereum, the second-largest cryptocurrency, which has experienced gains alongside Bitcoin," says Quinn-Kumar.

"This market momentum, combined with broader macroeconomic factors, has spurred speculative activity across the crypto market. We're seeing investors who are seeking diversification also turning to altcoins in anticipation that Bitcoin's momentum will continue to uplift the entire market."

Dogecoin has been the standout performer though. The meme coin had already been on the rise since Elon Musk referenced the creation of the so-called Department of Government Efficiency (acronym DOGE) at a Trump rally in late October.

In the week since the election Doge has recorded triple-digit price growth, though its value doesn't seem to have been buoyed any further by an official announcement of Musk's appointment as head of the Department of Government Efficiency earlier in the week.

What could the Trump regime mean for cryptocurrency?

Going forward, one of the major outstanding questions for the industry and investors with an eye on the value of their assets will be what the incoming Trump administration has in store policy-wise for digital assets and cryptocurrency in the future.

Caroline Bowler, chief executive of crypto exchange BTC Markets, says that the incoming administration is generally expected to create a more favourable environment for cryptocurrency.

"One of the key policy shifts under a Trump presidency is likely to be deregulation. Trump has publicly stated his intention to replace SEC Chair Gary Gensler, a figure criticised by the crypto community for his enforcement-heavy regulatory approach.

"Moving from enforcement to a more transparent, predictable framework that would foster the practical use of digital currencies. This change would reduce regulatory uncertainty and encourage businesses and investors to enter the market."

Bowler also says that there has even been speculation about the possibility of the US government setting up a strategic reserve of Bitcoin.

"Prominent US figures such as Wyoming Senator Cynthia Lummis have voiced strong support for Bitcoin. Lummis has led proposed legislation to allow the US government to purchase 200,000 Bitcoin annually for the next five years.

"This would mark a major step toward federal adoption of crypto and pave the way for greater institutional involvement.

"While the specifics remain uncertain, the mere perception of such moves is enough to drive prices upward in a market as narrative driven as crypto."

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