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Bitcoin surged on Monday following the assassination attempt on Donald Trump as traders increased bets that he will win the US presidential election in November.
Bitcoin prices rose 9.1% to a two-week high of $62,830 after a gunman attempted to assassinate President Trump at a campaign rally over the weekend, wounding him in the ear. Republican President Trump is seen as a more pro-cryptocurrency candidate, hosting industry executives at Mar-a-Lago and expressing enthusiasm for bitcoin mining in the United States.
The Trump campaign also became the first major US political party to accept cryptocurrency payments, raising hopes of a departure from the US regulatory crackdown on the industry seen in recent years.
“The chances of Donald Trump winning have increased significantly,” Grzegorz Drožiž, a market analyst at currency firm Konotokia, said, adding that a Trump presidency would “have a positive impact” on cryptocurrencies.
Immediately after the shooting, odds that Trump would win the November presidential election soared, according to live trading on political betting site PredictIt.
Shares of President Trump’s social media company Truth rose 60% in premarket trading. Trump Media & Technology Group, which went public in March through a merger with a blank-check company, saw its shares rise ahead of last month’s debate between Trump and President Joe Biden.
The drop in Trump’s chances of reelection also had an impact on financial markets broadly, with Treasury yields rising in comparison to the reaction to Biden’s dismal debate performance.
Many investors believe that Trump’s tax cuts will boost the budget deficit and inflation, hurting Treasury bonds and boosting the dollar — a pattern similar to what happened after his 2016 presidential election victory.
The U.S. Dollar Index, which tracks the greenback against six major currencies, had fallen so far in July as traders grew more hopeful that the Federal Reserve would cut interest rates in September, but was stable in morning trading.
Benchmark 10-year Treasury yields rose 0.04 percentage point to 4.22 percent, reflecting a small drop in prices. Futures tracking Wall Street’s blue-chip indexes, the S&P 500 and the tech-heavy Nasdaq 100, rose 0.5 percent and 0.6 percent, respectively, before the New York market opened.
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Monday’s move was “Chime[s] “It’s a typical Trump theme given the widespread perception that Trump is good for business and supports cryptocurrencies,” Rabobank analysts said in a client note.
“For the markets, the complexity of the US political backdrop is summed up in the assumption that the weekend’s events will lead to an increased likelihood of a Trump victory in November’s presidential election,” they added.
Bitcoin hit a record high of over $70,000 in mid-March but has struggled since the so-called halving in April, which reduced the number of daily bitcoins miners can share to secure the bitcoin network from 900 to 450. Some analysts had expected bitcoin to rise after the halving.
