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Bitcoin surged on Monday after the assassination attempt on Donald Trump, as traders increased their bets on the former president’s victory in November’s US presidential election.
Bitcoin rose more than 10 percent to $63,595, its highest level in two weeks, after Trump was wounded in the ear in an assassination attempt by a gunman at a campaign rally over the weekend. The Republican is seen as a more pro-crypto candidate, having hosted industry executives at Mar-a-Lago and expressing enthusiasm for US bitcoin mining.
Trump’s campaign has also accepted cryptocurrency payments, a first for a major US political party, raising hopes of a departure from the US regulatory crackdown on the industry that has taken place in recent years.
“The probability of Donald Trump’s victory has increased significantly,” said Grzegorz Dróżdż, a market analyst at the currency company Conotoxia, adding that a Trump presidency would “positively affect” cryptocurrencies.
Projected odds for a Trump victory in November jumped shortly after the shooting, according to live trading on political betting site PredictIt.
Shares of Trump’s Truth Social Media closed 31 percent higher. Trump Media & Technology Group, which reported an operating loss of $98 million in the three months to March 31, went public that month in a merger with a blank check company and recently rallied ahead of a debate between Trump and President Joe Biden last month. .
Prison operators gained, with Geo Group shares closing up nearly 10 percent and CoreCivic adding 8 percent. Shares of US arms manufacturers also rose. Sturm Ruger & Co gained up to 12 percent, while Smith & Wesson Brands even gained 14.3 percent.
“In terms of prison stocks, the expectation is that if Trump wins, he’ll be tougher on the border and those companies will benefit,” said Michael O’Rourke, chief market strategist at JonesTrading, who was less convinced that guns have a clear relationship with Trump. trade. “Gun stocks always have volatility around an election cycle, and it usually ends up being just a lot of noise in the market.”
The S&P 500 closed 0.3 percent higher today, though just shy of a new record high.
“A presidential candidate who survived an assassination attempt is good news in itself [Monday] it was a fair reaction,” O’Rourke continued. “But I don’t think stocks will run up a few percent here just because Trump is now the favorite to win the election by a larger margin than before.”
However, shortening the odds of a second Trump presidency sent ripples across the broader financial markets. U.S. Treasury yields rose slightly in a more subdued version of the reaction that followed Biden’s disastrous debate performance.
Many investors believe that Trump’s tax-cutting policies will lead to higher deficits and inflation, which would hit US Treasuries and send yields higher in a similar fashion to what they did after his 2016 election victory.
The U.S. dollar index, which tracks the greenback against a basket of six other major currencies, was steady and weakened in July as traders increased their bets on a September interest rate cut by the Federal Reserve.
Yields on the benchmark 10-year Treasury rose 0.04 percentage point to 4.22 percent, reflecting a small decline in price.
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Monday moves “ring[s] with a Trumpian theme given the popular narrative that he is good for business and . . . its pro-crypto stance,” Rabobank analysts said in a note to clients.
“For markets, the complexity of the US political backdrop has boiled down to the assumption that the weekend’s events will lead to an increased chance of Trump winning the November presidential election,” they added.