The U.S. presidential election is just one week away, and financial markets are witnessing a resurgence of the "Trump Trade" phenomenon. Bitcoin surged dramatically today (October 29), briefly surpassing $72,000, while other cryptocurrencies like Dogecoin and Ethereum also experienced significant gains. Additionally, stocks linked to former President Donald Trump soared, with Trump Media & Technology Group (DJT) surging 21.59% on October 28—a staggering 310% increase since late September.
Bitcoin Breaks $70,000 Barrier
On October 29, cryptocurrencies led by Bitcoin saw a sharp upward trajectory. Bitcoin peaked at $72,000, marking its highest level since June 7, while Ethereum, Dogecoin, BNB, and Cardano followed suit.
- 24-hour gains: Bitcoin (+5%), Dogecoin (+18%), Ethereum (+5%).
- Market catalysts: Trump's polling lead over Kamala Harris, Microsoft's potential Bitcoin investment, and BlackRock's $2.4 billion Bitcoin purchase.
- ETF inflows: U.S. Bitcoin spot ETFs attracted $3.1 billion in net inflows this month.
Analysts note that Bitcoin’s rally aligns with the "Trump Trade" narrative, as Trump has actively courted the crypto industry, pledging to make the U.S. the global hub for cryptocurrencies. In contrast, Democratic candidate Kamala Harris advocates for stricter regulatory frameworks, creating uncertainty about her potential impact on the market.
"Regardless of the election outcome, the U.S. presidential race remains a bullish catalyst for crypto," traders observed.
Trump-Linked Stocks Jump 310%
Trump Media & Technology Group (DJT) surged 21.59% on October 28, bringing its total gain to 310% since September’s low of $11.75. Trump owns ~57% of DJT, valued at ~$5.4 billion at its peak.
Other Trump-related stocks also rallied:
- Rumble: Conservative video platform rose 12%.
- Phunware: Software firm tied to Trump’s 2020 campaign gained 15%.
These spikes reflect growing market confidence in a Trump victory.
Morgan Stanley: Stocks Underpricing Trump Win
Morgan Stanley’s Mike Wilson highlighted that while some assets (e.g., Bitcoin, Mexican peso, Treasury yields) show tentative pricing of a Trump win, the broader market remains underpositioned. Financial stocks, however, are outperforming due to strong earnings and election speculation.
"A Trump victory isn’t fully priced in, and even if he wins, bullish sectors may not rally immediately," Wilson cautioned.
Nomura Warns of Over-Hedging "Trump Trade"
Nomura strategist Charlie McElligott warned that excessive hedging against a Trump/Republican sweep could backfire if Harris outperforms polls or a congressional deadlock occurs. Potential risks include:
- Bond rally: Short squeezes in Treasuries.
- Stock slump: 7–10% drop if Democrats secure a "blue sweep."
- Crypto/gold pressure: Sell-offs in alternative assets.
FAQ
Q: Why is Bitcoin surging ahead of the U.S. election?
A: Markets anticipate pro-crypto policies under a potential Trump administration, alongside institutional investments (e.g., BlackRock, Microsoft).
Q: What is the "Trump Trade"?
A: A market strategy betting on assets (stocks, crypto) likely to benefit from Trump’s deregulatory and pro-business agenda.
Q: How could a Harris win impact cryptocurrencies?
A: Increased regulatory scrutiny may slow crypto growth, though her stance remains less clear than Trump’s.
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