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Bitcoin has rallied to a three-month high this week, buoyed by hopes that the upcoming US elections will prove favourable for the crypto industry.
The world’s most valuable cryptocurrency was trading above $66,000 (£50,000) on Tuesday, up more than 100 per cent since this time last year and just a few thousand dollars away from the all-time high it experienced earlier this year.
The latest surge comes just two months after a panic-induced sell-off that saw bitcoin drop more than 20 per cent in value over just a few days.
With just three weeks to go until the presidential elections in the US, some market analysts and industry figures believe bitcoin’s price could be boosted by either of the two leading candidates winning the presidency.
“Donald Trump has embraced the crypto industry, positioning himself as the pro-crypto candidate,” David Ben Kay, a member of the governing board of the Ethereum Foundation, told The Independent.
“He has proposed several crypto-friendly policies, such as creating a national bitcoin stockpile and blocking the Federal Reserve from developing a digital currency. Trump’s pivot reflects a broader Republican strategy to court crypto supporters and donors.”
Democratic nominee Kamala Harris has been less vocal than Trump when it comes to courting the crypto industry, however she has made hints that she will be more favourable towards it compared to the current Biden administration.
At a campaign event on Monday, the Vice President Harris said she would build an “opportunity economy” that ensures regulatory frameworks that protect cryptocurrency owners.
With roughly 20 per cent of American adults now owning one or more cryptocurrencies, according to the Consumer Finance Institute, it is the first time that the topic has taken on significance in a major US election.
“While Harris hasn’t taken a strong pro-crypto stance, her openness to engaging with the industry suggests a willingness to evolve her stance, which is a positive,” Mr Kay said.
The latest price rally puts bitcoin’s market cap at around $1.3 trillion, ranking it in the top 10 most valuable assets in the world.
This position could make bitcoin immune to any major impact from the elections, according to BlackRock CEO Larry Fink. As the head of the world’s largest asset manager, Mr Fink oversaw the launch of the first spot Bitcoin ETFs (exchange-traded funds) earlier this year, which helped propel the cryptocurrency to a record price high.
The chief executive compared the crypto market to the housing market, claiming that it could follow a similar trajectory.
“I’m not sure if either president would make a difference,” he said during a third quarter earnings call on Friday.
“I truly don’t believe it’s a function of regulation. It’s a function of liquidity [and] transparency. Years ago, when we started the mortgage market, years ago when the high-yield market occurred, [it] started off very slow. It built as we built better analytics and data, and then better analytics and data, more acceptance, and a broadening of the market. And I truly believe we will see a broadening of the market of these digital assets.”
