Bitcoin reaches record high as Trump victory sparks crypto frenzy

London: As investors anticipated that former President Donald Trump's win in the U.S. presidential election would help cryptocurrencies, the price of bitcoin reached a new high on Wednesday.

Early trading saw a nearly 8% increase in Bitcoin, which broke its previous high established in March and surged past $75,000.

Other cryptocurrencies jumped, too, including ether, the world's second most popular cryptocurrency behind bitcoin, which rose 8%.

Dogecoin, another token, surged up to 18%. Elon Musk, a billionaire and one of Trump's most well-known supporters, favours it as his cryptocurrency. Ahead of the election, Trump, who had previously been sceptical of cryptocurrencies, changed his opinion and embraced them. He has promised to establish a "strategic reserve" of bitcoin and to turn America into "the crypto capital of the planet." He courted cryptocurrency enthusiasts at a Bitcoin conference in July, and his campaign accepted cryptocurrency donations. Along with family members, he also started a new cryptocurrency trading business called World Liberty Financial, AP reported.

“Bitcoin is the one asset that was always going to soar if Trump returned to the White House,” said Russ Mould, investment director at AJ Bell, a British online investment platform. After touching its new high, the market is now speculating about “when, not if, it will smash through $100,000,” he said.

“Trump has already declared his love of the digital currency and crypto traders now have a new narrative by which to get even more excited about where the price could go,” Mould said.

However, other experts warned of the risks.

“Investors should only dabble in crypto with money that they can be prepared to lose,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Because we’ve seen these wild swings in the past.”

Players in the cryptocurrency industry applauded Trump's win, believing he would be able to enact the laws and regulations they had long lobbied for. Trump had previously declared that if elected he would remove Gary Gensler, the chair of the Securities and Exchange Commission, who has been spearheading the American government's campaign against the cryptocurrency sector.

“Tonight the crypto voter has spoken decisively — across party lines and in key races across the country,” said Brian Armstrong, CEO of Coinbase, one of the biggest cryptocurrency exchanges. “Americans disproportionately care about crypto and want clear rules of the road for digital assets. We look forward to working with the new Congress to deliver it,” Armstrong posted on X.

According to Streeter, the Trump administration is expected to seek "light touch regulation" for the crypto industry.

“Certainly that’s what crypto fans would want,” she said. “They want the sheen of legitimacy to be brought to crypto, but they don’t want regulations to be too onerous to stop opportunities and innovation.”