In premarket trading, stocks linked to the cryptocurrency market saw notable gains, with Coinbase up 12% and MicroStrategy climbing 13%, as markets reacted positively to Donald Trump’s election victory. Futures on the Dow Jones Industrial Average surged by over 1,312 points, or 3.1%, while S&P 500 futures gained 2.12% and Nasdaq 100 futures rose 1.53%.
This rally follows expectations of Trump’s policies, which many investors believe could boost economic growth and corporate profits. It also comes as the market anticipates more rate cuts from the U.S. Federal reserve. "Despite expectations for a decrease in rate cut probabilities due to Trump’s 'friendlier' proposed policies, the market is still pricing in 1.8 cuts this year and three more cuts next year," QCP Capital analysts said in a Wednesday report.
The dollar climbed 1.8%, reaching levels not seen since July, while Treasury yields also rose, reflecting market optimism about stronger economic growth and potential fiscal spending under a Trump administration. The 10-year Treasury yield rose by 15 basis points, while the 2-year yield increased by 8 basis points.
Stocks in sectors seen as benefiting from Trump’s policies, such as Tesla, also rose sharply, with shares jumping 12.43%. Bank stocks, including JPMorgan, Bank of America, and Wells Fargo, gained at least 6%.
Bitcoin surged to an all-time high of over $75,000 in the past 24 hours, potentially benefiting from anticipation over relaxed regulation expectations under a Trump presidency. The broader cryptocurrency market also saw substantial gains, with the global market capitalization rising by 6.4% during the same period.
QCP Capital analysts pointed out a historical trend of sustained rallies for bitcoin following each U.S. election. "Bitcoin has now navigated three election cycles since its inception in 2009, each followed by rallies to new highs, with prices never dipping back to pre-election levels. We expect this bullish momentum to hold strong as we head into 2025," QCP Capital analysts said.
However, CoinCover Global Head of Strategic Development Anthony Yeung told The Block, that while President-elect Trump has expressed intentions to make the U.S. the "crypto capital" of the world, the specifics of his plans remain unclear. "I expect it to take some time to truly understand his stance towards crypto. It's in the interest of the industry that the U.S. moves sooner rather than later when it comes to crafting a regulatory framework," Yeung said.
Yeung further emphasized that the longer the U.S. delays regulatory action, the more likely it is that global standards, such as the European Union's MiCA legislation, will become the benchmark. "If the U.S. puts crypto regulation on the back burner for any longer, this could affect its ability to shape the regulatory landscape over the coming years," Yeung said.
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