Why Crypto Mania Is Reaching New Heights

Donald Trump's victory has a flavour of revenge—not just for the man but also for crypto bros and their assets of choice.

Over the course of election night, as it became clear Mr Trump had won America's presidential election, the price of bitcoin, the most widely traded cryptocurrency, jumped by 10%. On November 11th, as Republicans edged closer to taking control of Congress, it hit a record $89,000. Since mid-October it has surged by 45%.

Bitcoin is not alone in feeling the love. Excluding stablecoins, which are designed to avoid price swings, the top 20 crypto coins have appreciated even faster, on average, than bitcoin over the past week. Dogecoin, a meme coin often promoted by Elon Musk, a Trump fan-turned-adviser, has more than doubled since election day. The value of the global cryptocurrency market hit $3 trillion for the first time on November 12th.

That marks a stunning comeback from 2022-23, when a perfect storm sent cryptocurrencies tumbling from the peaks they had reached during the mania of 2021. Back then the Federal Reserve was raising interest rates at a brisk pace, cooling the speculative fever that had gripped markets in the wake of the covid-19 pandemic. Mismanagement and fraud caused several crypto firms once deemed above board—not least FTX, one of the largest crypto exchanges—to collapse, tainting the entire industry. Financial watchdogs doubtful of crypto's usefulness were starting to growl.