Cryptocurrency sees a significant rise as traders predict a trump win, influencing various market sectors
Bitcoin saw a notable increase on Monday, surging over 10% to $63,595 following an assassination attempt on Donald Trump. The former president, injured in the ear during a campaign rally shooting, is perceived as the more crypto-friendly candidate, having previously hosted industry executives at Mar-a-Lago and expressed support for US-based bitcoin mining.
Trump’s campaign’s acceptance of cryptocurrency payments, a first for a major US political party, has fueled optimism for a potential easing of the regulatory environment under a Trump presidency. Grzegorz Dróżdż, a market analyst at Conotoxia, stated that a Trump victory would “positively impact” the crypto industry.
The incident has also affected other market sectors. Shares in Trump’s Truth Social media company closed 31% higher, while prison operators Geo Group and CoreCivic saw gains of nearly 10% and 8%, respectively. US gun makers also experienced a surge, with Sturm Ruger & Co rising 12% and Smith & Wesson Brands increasing by 14.3%.
The S&P 500 closed 0.3% higher, falling just short of a new record high. Michael O’Rourke, chief market strategist at JonesTrading, noted that while the market reaction was fair, he does not foresee a significant long-term impact on stock prices purely based on the increased odds of a Trump victory.
Broader financial markets reflected the heightened chances of a Trump win. US Treasury yields edged higher, with benchmark 10-year Treasuries rising 0.04 percentage points to 4.22%. The US dollar index remained steady after a weaker performance in July.
Rabobank analysts highlighted that the market’s reaction aligns with the narrative of Trump being favourable for business and his pro-crypto stance. They noted that the weekend events have simplified the US political backdrop to an assumption of an increased chance of Trump winning the November presidential election.
Analysis
Political
The market’s reaction to the assassination attempt on Donald Trump underscores the significant influence of political events on financial markets. A potential Trump presidency is seen as favourable for the cryptocurrency industry, reflecting his pro-crypto stance and previous engagements with industry leaders.
Social
Socially, the acceptance of cryptocurrency payments by Trump’s campaign indicates a growing integration of digital currencies into mainstream political processes. This move could further legitimize cryptocurrency as a viable financial tool and encourage its broader adoption.
Racial
The political climate surrounding the assassination attempt and its market repercussions highlight ongoing racial and social tensions. Trump’s policies, perceived as divisive by many, continue to polarize public opinion, impacting various sectors differently based on their alignment with his administration’s potential policies.
Gender
The market’s response to Trump’s increased election odds reflects broader societal debates about leadership and security. The incident and its aftermath may influence voter perceptions about safety and stability, impacting gender dynamics within the political landscape.
Economical
Economically, the Bitcoin surge and related stocks’ performance indicate that investors are betting on a favourable outcome for businesses under a Trump presidency. This could lead to increased market volatility as the election approaches, with sectors like cryptocurrency, private prisons, and gun manufacturing seeing significant fluctuations.
