NEW YORK — Bitcoin and other cryptocurrencies surged on Monday, extending a rally ignited last week by the reelection of former President Donald Trump.
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Bitcoin jumped nearly 11% in early trading, breaking a new record as it soared past $87,000 for the first time. Ether, the second-largest cryptocurrency by market capitalization, also gained, climbing 5.5%.
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Investor enthusiasm extended to other digital assets. Litecoin saw a more than 4% increase, while dogecoin spiked by nearly 25%.
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“They’ve been collectively on a tear,” said Katie Stockton, founder of market research firm Fairlead Strategies, in a statement to media. “Much like bitcoin, we’ve seen breakouts across the cryptocurrency markets.”
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According to experts, the digital asset boom reflects optimism around Trump’s support for the cryptocurrency industry. Trump has vowed to bolster the sector and roll back regulations imposed by the Biden administration.
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During a cryptocurrency conference in Nashville in July, Trump pledged to transform the U.S. into the “crypto capital of the planet” and proposed creating a National Strategic Bitcoin Reserve to solidify the country’s crypto standing. He also promised to replace SEC Chair Gary Gensler, whose strict regulatory stance has been controversial among cryptocurrency advocates.
“Crypto has moved a lot since the election, and to me, that’s on the news of a changing regulatory environment,” Bryan Routledge, a finance professor at Carnegie Mellon University, told media.
Cryptocurrency price increases on Monday vastly outpaced U.S. stock market growth. In early trading, the S&P 500 rose 0.25%, the Dow Jones Industrial Average climbed 0.75% (about 330 points), and the Nasdaq ticked up just 0.1%.
The bitcoin price spike marks a significant moment for the world’s largest cryptocurrency, capping a period of extraordinary returns dating back to last year. Bitcoin’s price has surged by 122% since November 2023, bolstered by the U.S. approval of Bitcoin ETFs (Exchange-Traded Funds) in January, which let investors buy into an asset tracking bitcoin’s price movements without purchasing the cryptocurrency directly.
“If you look at how bitcoin’s price has moved over the last year, the rise over the last week is impressive, but the rise over the last year has been five times as stunning,” Routledge said.
This latest boom comes after a turbulent period for the crypto industry. Major exchanges such as FTX and Binance faced high-profile collapses and legal controversies, shaking investor confidence. FTX, co-founded by Sam Bankman-Fried, went bankrupt in November 2022, sparking a lengthy legal saga that culminated in Bankman-Fried’s 25-year prison sentence for fraud. In April, Binance founder Changpeng Zhao was sentenced to four months in prison following charges related to illicit financial activity on the platform.
Despite its recovery, cryptocurrency remains notoriously volatile. “It can drop and it can go up very, very quickly,” said David Yermack, finance professor at NYU’s Stern School of Business. “It’s extraordinarily volatile.”
Experts caution that volatility is likely to persist even if Trump eases regulations. Since cryptocurrency is not widely used for everyday transactions, it primarily serves as a “store of value,” similar to gold. Such assets often see rapid value shifts influenced by economic conditions, Routledge explained.
“We don’t use cryptocurrency to buy coffee,” Routledge said. “It serves as digital gold, and assets like that tend to be fairly volatile.”
