5 min readBitcoin is hovering around its record high above76k reached this week following Donald Trump’s victory in the presidential election and after the Federal Reserve cut interest rates again.
Bitcoins’ recent spike has seen it emerge as the 9th largest asset in the world with a market cap of $1.482 trillion, surpassing the market cap of Facebook parent Meta in a similar move that was seen back in March. Meta has risen 65% this year, Bitcoin has outpaced it with 75% gains across the same timeframe.
The world’s largest cryptocurrency surged to record highs just shy of 77k this week on optimism of more crypto-friendly US regulation across Trump’s second term in office. It’s worth noting that Trump oversaw not one but two all-time high cycles in his 2016 to 2020 presidential term.
The Fed cuts rates by 0.25% as expected
Meanwhile, the Federal Reserve cut interest rates again, reducing them by 25 basis points as was widely expected. This marks the second rate cut by the Federal Reserve, taking rates to the range of 4.5% to 4.75%. Fed chair Powell noted that the US economy was in a good place, and the central bank would continue to cut interest rates gradually and cautiously.
Powell added that the central bank’s outlook was unchanged in the near term despite political changes but would remain data-dependent, adjusting policies as needed in the longer term.
A low-rate environment improved liquidity, benefitting risk assets such as crypto.
However, the longer-term outlook for interest rates has turned more uncertain, given that Trump is expected to implement more inflationary policies. A slower pace of rate cuts or a higher neutral rate could risk Bitcoin’s rally. For now, however, this is being overshadowed by optimism of a more crypto-friendly stance from the White House.
BTC ETFs see record inflows
Bitcoin ETF net inflows reached a record $1.37 billion on November 7th as the price came close to 77k. According to Farside Investor data, the total investment in spot Bitcoin ETFs has been $25.5 billion since January.
BlackRocks IBIT funds saw $1.12 billion in inflows, its highest fund flow day since launch bringing total funds to $27 billion.
Dogecoin soars 25% on Trump Musk optimism
While bitcoin is on track to book gains of 10% this week, BTC is being outperformed by ETH which is set for 16% gains, SOL is up 22%, and DOGE has rallied an impressive 25% this week.
DOGE is up over 50% from its November 3 lows to this week’s highs, boosted by Trump’s victory and optimism surrounding the outlook for cryptocurrencies. With Elon Musk a close ally of Trump’s and Trump and Musk planning to create a Department of Government Efficiency (DOGE), Dogecoin could be a standout beneficiary. This could amplify Musk’s influence in the crypto sector, potentially boosting interest in DOGE further.
DOGE is seen trading toward its 2024 high
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