Why Bitcoin's Rally Is Just Getting Started After Trump, Republican Wins

As election results poured in on and after election day, Bitcoin crossed a new all-time high as it broke through $74,000.

Donald Trump reclaimed the presidency after passing 270 electoral college votes, and odds of a Republican sweep continued to rise as congressional results poured in. Republicans regained control of the Senate in powerful fashion, after former head of the Senate Banking Committee Sherrod Brown was ousted from the seat he has held since 2007 by challenger Bernie Moreno.

While results of House races were too close to call for control, odds of a Republican sweep surged to hit 98% on betting site Polymarket as of Wednesday morning. Since polls first closed Tuesday night, Bitcoin had surged 7%.

Other cryptocurrencies also surged, with Ethereum rising 8% and Elon Musk's favored Dogecoin rising another 17%. The backdrop seemed to just be the beginning of a longer spike to potentially top $100,000 before 2024 comes to an end.

Fundstrat's Head of Digital Asset Strategy Sean Farrell, who had previously predicted Bitcoin will cross $115,000 by the end of the year, had said the reaction would be fast as results trickled in.

"We likely see a lot of volatility as leverage pours into the market, but the direction is clear, and the trajectory will be sharp," he wrote in a new research note. "We think it is right to expect a violent binary reaction to the election results (Trump higher, Harris lower), but eventually, we will resume trading in concert with changes in the macro backdrop."

But with Republicans seemingly closing on control of the House as well, Farrell predicts that the velocity of the upward move should accelerate as models work to adjust for a higher likelihood of Trump's Bitcoin campaign promises, including a U.S. Bitcoin strategic reserve.

"A red sweep... would immediately dismantle the anti-crypto regulatory apparatus ... and force investors to adjust their modeled probability of the U.S. adopting BTC as a strategic reserve asset upwards from zero," Farrell said.

To be sure, Decision Desk HQ had not yet called House control in favor of Republicans just yet. Republicans still needed to pick up about 14 more seats as of Wednesday afternoon.

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