- Bitcoin has hit a record high as Donald Trump leads in the US presidential election.
- Trump's support for digital assets is boosting investor confidence in cryptocurrencies.
Bitcoin hit a record high as Republican candidate Donald Trump took the clear lead in the US presidential election on Tuesday night.
The former president's position in the race prompted a rush of so-called Trump trades as investors bet on assets that could gain under another Trump term.
One of the winning trades was cryptocurrencies. Trump has supported digital assets in recent years and his pro-crypto stance is lifting bitcoin to a new record high, wrote Yeap Jun Rong, a market strategist at IG, on election night.
Bitcoin climbed to over $75,000 Tuesday night, and while it slightly pared gains, the currency was up 8% around $74,700 at 12:51 a.m. ET on Wednesday.
The digital asset also jumped because a potential Trump presidency is associated with tax cuts, steeper tariffs, a deeper deficit, a higher level of debt, more Treasury issuance, and higher inflation, Kyle Rodda, a senior market analyst at Capital.com, wrote in a note.
The US dollar is expected to rise on higher Treasury yields because higher inflation would constrain the Federal Reserve's ability to cut rates.
"The greater inflationary risks and higher levels of debt also support assets like gold and bitcoin, which investors buy to hedge themselves against such trends," Rodda wrote.
The crypto industry has been at odds with President Joe Biden's administration over regulations — though the currency surged more than 100% during his term.
Crypto investors expect a friendlier reception with Trump and Vice President Kamala Harris, the Democratic candidate, who has also embraced crypto.
Gautam Chhugani, a Bernstein analyst, said in September that bitcoin could hit $90,000 by December if Trump wins the election.
"Elections remain hard to call, but if you are long crypto here, you are likely taking a Trump trade," Chhugani said.