Bitcoin Surges Towards $100,000 Following Election Results

Bitcoin has surpassed $93,000 as of Wednesday, continuing its upward trajectory in the aftermath of the November 5 elections. With President-elect Donald Trump advocating for cryptocurrency during his campaign, a more favorable regulatory environment for digital assets is anticipated. This shift could benefit bitcoin ETFs and related stocks like Coinbase Global (COIN) and Robinhood Markets (HOOD). Bernstein analysts are encouraging investors to explore opportunities in the crypto sector.

Bitcoin reached a new record high of $93,445 on Wednesday, reflecting a nearly 34% increase since Election Day, according to CoinDesk. However, it dipped to around $89,000 later in the day.

Bernstein analysts, in a note released on Monday and reported by The Block, advised investors to gain exposure to the crypto market "as soon as possible."

Cautious Investment Strategy Recommended

"Don’t resist this trend," stated analysts led by Gautam Chhugani. "Welcome to the crypto bull market — invest in as much as you can." They urged investors who had previously avoided crypto due to regulatory issues to reconsider their stance following the election results. Bernstein expressed optimism about a more supportive regulatory framework under Trump, which may include a new chair for the Securities and Exchange Commission.

During his campaign, Trump committed to replacing SEC Chair Gary Gensler with a pro-crypto candidate and proposed establishing a national bitcoin reserve. At a crypto conference in July, he promised to position the U.S. as the "crypto capital of the planet and the bitcoin superpower of the world."

Bernstein remains "confident" in its $200,000 bitcoin price target by the end of 2025. They believe the risk-reward scenario is favorable for the next 12 months, even as bitcoin hits new highs.

Other analysts have identified $100,000 as the next significant target for bitcoin, potentially achievable by the end of the year.

However, new investors should exercise caution regarding potential risks, as highlighted by Anthony Yeung, global head of strategic development at CoinCover.

"Bitcoin's volatility can attract new investors, but it's crucial to understand the associated risks in any bull market," Yeung stated. "A key trend to note is the link between new market participants and an increase in malicious activities... With bitcoin expected to rise further this week, new investors should be especially vigilant about these threats."

Bitcoin-Driven Market Activity

In related news, spot bitcoin ETFs attracted $1.93 billion in inflows through Tuesday, with BlackRock's iShares Bitcoin Trust ETF (IBIT) leading the charge with $1.53 billion, according to Farside Investors data.

Spot bitcoin ETFs saw $1.63 billion in inflows during the election week, balanced against $657.9 million in outflows on Monday and Tuesday. The iShares Bitcoin Trust ETF (IBIT) emerged as the week's frontrunner with $1.25 billion in inflows.

Since their launch in January, spot bitcoin ETFs have accumulated a total of $27.72 billion in inflows, countered by $20.1 billion in outflows from the Grayscale Bitcoin Trust (GBTC). IBIT leads with $28.92 billion in inflows, while the Fidelity Wise Origin BTC ETF (FBTC) follows with $10.93 billion.

Both IBIT and spot bitcoin ETFs experienced a rise in premarket trading on Tuesday, adding to their 13% increase on Monday. Shares of these ETFs are trading at or near record highs, with many exceeding their individual buy zones. The group has gained approximately 30.5% year-to-date.

Coinbase's stock fell by 10.8% on Wednesday, adjusting after a 20% surge on Monday. The crypto exchange's shares had previously soared by 48% last week, reaching 270.74, just shy of a multiyear peak.

Coinbase successfully broke through a 283.48 buy point during a 32-week consolidation period, with COIN stock rising about 64% this year.

Robinhood, a trading app supportive of crypto, jumped 27.4% last week to 30.54, the highest level in nearly three years. HOOD stock increased another 7.4% on Monday but saw a decline on Wednesday.

Bitcoin miners also saw gains on Monday, extending their upward momentum from the previous week. Stocks in this sector showed mixed results on Tuesday and Wednesday amid

FAQ: Bitcoin Surges Towards $100,000 Following Election Results

1. What is the current price of Bitcoin?

   • As of Wednesday, Bitcoin has surpassed $93,000 but later dipped to around $89,000.

2. Why is Bitcoin's price increasing?

   • Bitcoin's price is rising due to favorable election results and the expectation of a more supportive regulatory environment for cryptocurrencies under President-elect Donald Trump.

3. What impact does Trump’s election have on cryptocurrency?

   • Trump has expressed pro-crypto sentiments, including plans to replace the SEC Chair with someone supportive of cryptocurrency and to establish a national bitcoin reserve, which may lead to a more favorable regulatory landscape.

4. What are analysts predicting for Bitcoin's future price?

   • Bernstein analysts are confident in a $200,000 price target for Bitcoin by the end of 2025, while other analysts have identified $100,000 as the next significant target for the cryptocurrency.

5. What should new investors consider before investing in Bitcoin?

   • New investors should be aware of Bitcoin's volatility and the associated risks in any bull market. It's important to understand the potential for malicious activities linked to new market participants.

6. What are spot Bitcoin ETFs and how are they performing?

   • Spot Bitcoin ETFs are investment funds that track the price of Bitcoin. They have seen significant inflows, totaling $1.93 billion through Tuesday, with BlackRock's iShares Bitcoin Trust ETF leading the way.

7. How have Bitcoin ETFs performed since their launch?

   • Since their launch in January, spot Bitcoin ETFs have accumulated $27.72 billion in inflows, with significant interest from investors following the recent elections.

8. What is the significance of Bitcoin reaching record highs?

   • Reaching record highs indicates strong market demand and investor confidence in Bitcoin, which can lead to increased interest and investment in the cryptocurrency sector.

9. How are stocks related to cryptocurrency, such as Coinbase and Robinhood, performing?

   • Coinbase's stock has experienced fluctuations, recently falling by 10.8% after a significant rise. Robinhood's stock also saw gains but faced a decline on Wednesday.

10. What advice do analysts have for investors looking to enter the crypto market?

    • Analysts advise investors to embrace the current crypto bull market and invest as much as they can while being cautious about the inherent risks and volatility associated with cryptocurrencies.