Bitcoin has risen more than 8% over the past two sessions, coming close to its all-time high of around $74,000, which was reached in March.
This comes as US exchange-traded funds investing in Bitcoin have seen massive net inflows over the past few days.
In the past few hours, Bitcoin has hit $73,525, approaching a new all-time high, while other cryptocurrencies, such as Ethereum, the second-largest cryptocurrency, and meme-favorite Dogecoin, have also seen a rise.
Elections push Bitcoin higher
Some believe that Bitcoin’s rise is linked to former President Donald Trump’s chances of winning the election, as he showed his support for cryptocurrencies during his campaign. With Trump leading the market, opinion polls indicate a close race between him and Vice President Kamala Harris, the Democratic Party’s candidate.
Tony Sycamore, an analyst at IG Australia, noted in a note that Bitcoin continues to react to the possibility of a Trump election victory, adding that to build confidence in further gains, Bitcoin needs to settle above $70,000 after hitting a record high of $73,798 in March.
Trump has promised to make the United States the world’s crypto capital, while Harris has taken a more cautious stance, calling for a regulatory framework for the sector. This contrasts sharply with the regulatory tightening the sector has seen under the Biden administration.
Trump also said he intends to appoint Elon Musk, one of his top campaign funders, to lead an initiative to cut government spending called the Department of Government Efficiency, known by the acronym DOGE, in reference to the Dogecoin that Musk supports.
On the other hand, Arisa Toyosaki, co-founder of Sega, a crypto derivatives services company, pointed out that Musk's support for the Trump campaign contributed to raising morale among traders.
Options traders have increased their expectations that Bitcoin could hit $80,000 by the end of November, regardless of the election outcome. Expectations of price volatility on Election Day, November 5, have also increased, and Bitcoin exchange-traded funds have seen net investments of about $3.6 billion so far this month.
On the other hand, Bitcoin has faced challenges from reduced bets on a Fed rate cut and a report of greater scrutiny of the stablecoin Tether. However, the leading digital currency has risen 71% since the beginning of 2024.
Mutual Fund Flows
US exchange-traded funds investing in bitcoin saw net inflows of $870 million, their third-highest daily total.
Tuesday’s inflows brought inflows so far into the 12-fund group to more than $23 billion, according to data compiled by Bloomberg. ETF issuers include the likes of BlackRock Inc. and Fidelity Investments.
While Trump leads in prediction markets, polls show a tight race against Democratic nominee Vice President Kamala Harris, who has pledged to support a regulatory framework for the crypto industry.
