Market Update: The Trump-Fueled Crypto Rally

Trump’s decisive election win caused a broad rally in the financial markets. US equities and the dollar were among the biggest beneficiaries. Certain individual stocks like Coinbase and Robinhood experienced some of their best short-term gains on record.

Perhaps the most impressive and persistent move has been seen in the crypto market though. It’s about to close out its 6th straight day of gains after the move was kickstarted on Tuesday night (UTC).

Here’s a brief recap of some of the most impressive highlights.

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Bitcoin and the overall market

The crypto market jumped 9% on Wednesday and has continued upwards since then, extending the gain to more than 22% since the election was called. Investors see the regime change as a massive milestone for the crypto industry that has been under heavy (and arguably unfair) scrutiny under the Biden administration.

After all, Donald Trump is the first self-proclaimed Bitcoin president of the United States and has made some pretty spectacular promises about turning BTC into a strategic reserve asset for the country.

Bitcoin reached a new all-time high on Wednesday, surpassing its previous high of $73,835 set in March. It’s up almost 20% as of Sunday 7 pm (CET), currently pushing $81,000. This is a massive story in and of itself but Bitcoin hasn’t even been the best performer this week.

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Is Ethereum back?

Trump is also heavily involved in Decentralized Finance (DeFi), another part of the crypto industry where Ethereum is one of the leading blockchains. And the native Ethereum currency (ETH) was indeed the real bright spot of the week.

After lagging its peers for months, it’s now up 34% since Tuesday and currently holds strong above $3,200. It has even outperformed Solana (SOL) over the past few days, although not by much.

For the technicians out there, ETH also smashed through the $2,800 - $2,900 level that has served as support and resistance on multiple occasions this year. Despite this move, ETH is still 50% away from its all-time high from 2021.

Some of the biggest DeFi gainers this week include Aave (AAVE) +48%, Jupiter (JUP) +47%, and Lido (LDO) +44%.

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Memes are joining the party

The memecoin market has been red-hot recently with several new tokens popping off and reaching valuations in the hundreds of millions of dollars. I think we saw a bit of a shift immediately after the election toward the ones mentioned above, including the whole DeFi space.

However, the shift didn’t last long. Meme coins have once again caught a bid over the weekend with some of the majors leading the charge.

Dogecoin (DOGE), Elon Musk’s favorite meme coin, is up 25% on the day. Shiba Inu (SHIB), the second largest meme coin by market cap, is up 34%. They’re up 86% and 66% respectively for the week.

DOGE now has a $40 billion market cap while SHIB has topped $16 billion. The latter also reclaimed a top 10 spot among all cryptocurrencies by market cap.

PEPE and BONK aren’t far behind in terms of weekly gains with +59% and 54% moves respectively. AI meme coin phenomenon Goatseus Maximus (GOAT) is up 90% for the week. Things are getting ridiculous in the meme trenches.

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Correction soon?

I’m fully expecting the market to make a proper retracement soon. This is crypto, after all. And after a large, short-term move like the one we’ve had this week, the market will likely need a breather soon.

“Soon” is relative though. It could be within the next hours or it could be in a few weeks. The market may also go significantly higher before then. And the correction might be shallow and quick.

In conclusion: I won’t try to time a correction. I will, however, be prepared to buy the dip, if a sufficiently large one will occur.

I’d be curious to hear how you’re playing the crypto market. Drop some comments below or share this post with a friend! 🙏