Cryptocurrencies: Trump election “historic moment”

With the election of crypto-friend Trump as US president, Bitcoin is rising towards 100,000 US dollars. Trading in crypto ETNs is really busy - with almost only purchases and some profit-taking.

14 November 2024 FRANKFURT (Frankfurt Stock Exchange). Price explosion on the crypto market - Donald Trump's victory in the US election has seen Bitcoin break new records.

The most important cryptocurrency cost 90,680 US dollars on Thursday morning, compared to less than 69,000 US dollars before the election result was announced. This means that the Bitcoin price has now more than doubled since the beginning of the year. The prices of other cryptocurrencies have also shot up, such as Solana and Ethereum, but have not yet reached their old highs.

Dovile Silenskyte from issuer WisdomTree refers to Donald Trump's plans to create a strategic Bitcoin reserve. “It would probably have a very positive impact on bitcoin prices if the US government started holding large amounts of bitcoin,” she explains and speaks of a ‘huge impact on global perception and acceptance’.

Bitcoin ETNs in particular demand

Trading in crypto ETNs is extremely busy. “We have a lot of turnover due to the market movement,” reports Ivo Orlemann, who trades crypto ETNs for ICF Bank. “It's mostly purchases, but also some profit-taking.” Most of them are Bitcoin trackers such as VanEck Bitcoin (DE000A28M8D0) or Invesco Physical Bitcoin (XS2376095068), but also Solana (DE000A3GSUD3, CH1114873776), Ethereum (DE000A3GPSP7, GB00BJYDH394) and Ripple ETNs (CH0454664043) from 21Shares, WisdomTree or VanEck as well as crypto baskets. “Cryptos are the big topic for us at the moment,” reports Andreas Schröer from Lang & Schwarz. He is also seeing purchases, for example of 21Shares Solana Staking (CH1114873776).

According to the issuers, inflows into Bitcoin ETNs have recently increased. However, outflows have still dominated in Europe since the beginning of the year, amounting to USD 670 million, according to the latest figures from Bloomberg. Solana and Ethereum ETNs, on the other hand, have seen inflows this year. 

”100,000 US dollars possible”

“The election is considered a historic moment,” notes Adrian Fritz from 21Shares. For the first time, a presidential election was also about the crypto sector. “After years of regulatory resistance and many restrictions, the sector could finally gain more legitimacy under new political leadership.” The crypto-friendly stance of the Trump administration - together with a mature regulatory environment - promises a bright future for the sector. Fritz also points to the falling key interest rates, which make cryptocurrencies even more interesting. “With loose monetary conditions like in 2020, Bitcoin could exceed the six-digit mark - i.e. 100,000 US dollars.”

Halving also positive

For André Dragosch from Bitwise, formerly ETC Group, the US election result is not the only price driver. Historically, Bitcoin has developed extremely positively after the last three presidential elections - regardless of whether a Democrat or a Republican won the election. One of the reasons for this is that the elections coincided with the Bitcoin halvings, the halving of the rate at which new Bitcoin is created, which take place every four years. “This leads to a shortage of supply.”

“Still highly speculative”

Critical voices have become rare. Crypto analyst Timo Emden from Emden Research at least takes a differentiated view of the crypto rally. He believes it is far from certain that Trump will keep his promises, as he explains in a Handelsblatt podcast. Trump railed against Bitcoin for a long time and then suddenly - probably to win the favor of voters - “promised the blue sky”. In addition, the promised deregulation could also “backfire”, as consumer protection could be neglected and new cases of fraud could arise. Emden also believes the 100,000 US dollar figure is possible, depending on what Trump sets in motion. “However, past price trends are no indication of the future; cryptocurrencies are still highly speculative.”