Bitcoin Soars as Cryptocurrency Enthusiasm Surges in Trump’s Spotlight

Joe McCann found himself in his Miami condo, intently watching multiple screens that displayed bitcoin transactions while the U.S. election outcomes were being announced.

“As soon as the initial polls were closed, we witnessed a significant increase in buying from the U.S., and it has continued relentlessly,” McCann, the founder of the crypto-centric hedge fund Asymmetric, commented. “At this moment, there’s a palpable sense of jubilation within the crypto community.”

Indeed, since November 5, bitcoin BTC= has surged by over 32% to a record-breaking high exceeding $91,000. Investors are optimistic about President-elect Donald Trump’s supportive stance on digital currencies, anticipating a more lenient regulatory framework which could revitalize bitcoin following several stagnant months.

On Binance, the largest cryptocurrency exchange globally, the average daily trading volume of bitcoin from November 6 to November 13 soared to approximately $493 million, almost twice the average of about $252 million for the year, according to data from crypto analytics firm Kaiko. Similarly, trading volumes on Coinbase COIN.O tripled the annual average, reaching more than $108 million per day during the same timeframe.

Additionally, U.S.-listed exchange-traded funds (ETFs) that track the spot price of bitcoin saw unprecedented daily net inflows of $1.43 billion on November 7, as per CoinShares. These funds are particularly popular among institutional investors.

However, several market experts have warned that the current investor enthusiasm might lead to sharp profit-taking and market corrections in the upcoming weeks. The Coinglass bitcoin “fear and greed” index, which gauges market sentiment, is currently deep in the “greed” zone.

“There could be some confusion as market insiders attempt to decipher whether a Trump administration will lead to a more balanced regulatory framework, a deregulated free-for-all, or if Trump might lose interest in cryptocurrency altogether,” explained Matthew Graham, managing partner at Ryze Labs.

Cryptocurrency Market Surges Past $3 Trillion

The situation is certainly volatile.

Bitcoin’s 30-day annualized volatility has climbed back to over 58%, the highest since September, following a dip to as low as 25% in June, based on information from The Block.

The growth isn’t just limited to bitcoin; the total market capitalization of all cryptocurrencies has reached a new peak of $3.16 trillion, according to CoinGecko. Furthermore, the open interest on derivatives exchanges has hit a new record, exceeding $102 billion, as shown by Coinglass data.

Ethereum ETH= has also seen a substantial increase, rising about 32% since the election, while the market cap of tokens focused on decentralized finance reached a five-month high of $93 billion.

Despite the initial wave of enthusiasm, the specifics of potential regulatory changes under the new administration are still unclear.

Focus is currently on who will fill the role of Trump’s U.S. Treasury Secretary, with potential candidates like Howard Lutnick and Scott Bessent, who are considered more favorable towards cryptocurrencies.

Ryan Lee, the chief analyst at Bitget Research, advises traders to be cautious of potential abrupt market pullbacks, noting: “The appointment could provoke short-term speculative activity.”