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Bitcoin Rises above $90,000 on Trump Euphoria

Bitcoin logos are displayed at the Inside Bitcoins conference and trade show on April 7, 2014, in New York. (AP)
Bitcoin logos are displayed at the Inside Bitcoins conference and trade show on April 7, 2014, in New York. (AP)
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Bitcoin Rises above $90,000 on Trump Euphoria

Bitcoin logos are displayed at the Inside Bitcoins conference and trade show on April 7, 2014, in New York. (AP)
Bitcoin logos are displayed at the Inside Bitcoins conference and trade show on April 7, 2014, in New York. (AP)

Bitcoin charged past the $90,000 level on Wednesday, as its relentless rally showed no signs of easing on expectations that Donald Trump as US president and his administration will be a boon for cryptocurrencies.

The world's biggest cryptocurrency has become one of the most eye-catching movers in the week since the election and touched $91,110 - a record high. It was last up 3% at $91,016, marking a 32% rise since the Nov. 5 election.

Smaller peer ether has similarly soared 37% since election day, while Dogecoin, an alternative token, promoted by billionaire Trump-ally Elon Musk was up more than 150% as the bitcoin frenzy extended across the crypto landscape.

Trump embraced digital assets during his campaign, promising to make the United States the "crypto capital of the planet" and to accumulate a national stockpile of bitcoin.

It is not clear how or when that could happen, but the possibility drove a speculative surge in crypto mining and trading stocks.

Software company and investor in bitcoin MicroStrategy announced it had spent about $2 billion buying bitcoin between Oct. 31 and Nov. 10. Shares scaled a record high on Tuesday.

Crypto investors see an end to increased scrutiny under US Securities and Exchange Commission Chair Gary Gensler, whom Trump has said he will replace. Trump also unveiled a new crypto business, World Liberty Financial, in September.

"Key areas to monitor include potential regulatory changes, increased institutional participation, and a rise in M&A activity," said Carl Szantyr, managing partner of digital asset hedge fund Blockstone Capital.

"The new political landscape may bring clearer regulations for crypto assets and could prompt strategic developments, such as a national bitcoin reserve and growth in the mining sector."

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Dollar Strengthens on Elevated US Bond Yields, Tariff Talks

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
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Dollar Strengthens on Elevated US Bond Yields, Tariff Talks

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo

The dollar rose for a second day on Wednesday on higher US bond yields, sending other major currencies to multi-month lows, with a report that Donald Trump was mulling emergency measures to allow for a new tariff program also lending support.

The already-firm dollar climbed higher on Wednesday after CNN reported that President-elect Trump is considering declaring a national economic emergency as legal justification for a large swath of universal tariffs on allies and adversaries.

The dollar index was last up 0.5% at 109.24, not far from the two-year peak of 109.58 it hit last week, Reuters reported.

Its gains were broad-based, with the euro down 0.43% at $1.0293 and Britain's pound under particular pressure, down 1.09% at $1.2342.

Data on Tuesday showed US job openings unexpectedly rose in November and layoffs were low, while a separate survey showed US services sector activity accelerated in December and a measure of input prices hit a two-year high - a possible inflation warning.

Bond markets reacted by sending 10-year Treasury yields up more than eight basis points on Tuesday, with the yield climbing to 4.728% on Wednesday.

"We're getting very strong US numbers... which has rates going up," said Bart Wakabayashi, Tokyo branch manager at State Street, pushing expectations of Fed rate cuts out to the northern summer or beyond.

"There's even the discussion about, will they cut, or may they even hike? The narrative has changed quite significantly."

Markets are now pricing in just 36 basis points of easing from the Fed this year, with a first cut in July.

US private payrolls data due later in the session will be eyed for further clues on the likely path of US rates.

Traders are jittery ahead of key US labor data on Friday and the inauguration of Donald Trump on Jan. 20, with his second US presidency expected to begin with a flurry of policy announcements and executive orders.

The move in the pound drew particular attention, as it came alongside a sharp sell-off in British stocks and government bonds. The 10-year gilt yield is at its highest since 2008.

Higher yields in general are more likely to lead to a stronger currency, but not in this case.

"With a non-data driven rise in yields that is not driven by any positive news - and the trigger seems to be inflation concern in the US, and Treasuries are selling off - the correlation inverts," said Francesco Pesole, currency analyst at ING.

"That doesn't happen for every currency, but the pound remains more sensitive than most other currencies to a rise in yields, likely because there's still this lack of confidence in the sustainability of budget measures."

Markets did not welcome the budget from Britain's new Labor government late last year.

Elsewhere, the yen sagged close to the 160 per dollar level that drew intervention last year, touching 158.55, its weakest on the dollar for nearly six months.

Japan's consumer sentiment deteriorated in December, a government survey showed, casting doubt on the central bank's view that solid household spending will underpin the economy and justify a rise in interest rates.

China's yuan hit 7.3322 per dollar, the lowest level since September 2023.