Bitcoin is the largest and oldest cryptocurrency, although other assets like ethereum, tether and dogecoin have gained popularity over the years. Some investors see cryptocurrency as a “digital alternative” to traditional money—but it can be very volatile, with its price reliant on larger market conditions.
The best crypto platforms and apps
We’ve ranked the best crypto exchanges in Canada.
Why are bitcoin and other crypto assets soaring?
A lot of the recent action has to do with the outcome of the U.S. election.
Trump has evolved from a crypto skeptic to a crypto champion and has pledged to make the U.S. “the crypto capital of the planet” and create a “strategic reserve” of bitcoin. His campaign accepted donations in cryptocurrency and he courted fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.
Crypto industry players welcomed Trump’s victory, in hopes that he would be able to push through legislative and regulatory changes that they’ve long lobbied for. Trump also had promised that, if elected, he would remove the chair of the Securities and Exchange Commission, Gary Gensler, who has been leading the U.S. government’s crackdown on the crypto industry and repeatedly called for more oversight.
Digital assets like bitcoin had posted notable gains in the months ahead of the election, mostly due to the early success of a new way to invest in the asset: spot bitcoin ETFs, which were approved by U.S. regulators in January.
Inflows into spot ETFs “have been the dominant driver of bitcoin returns from some time, and we expect this relationship to continue in the near-term,” Citi analysts David Glass and Alex Saunders wrote in a research note two weeks ago. They added that spot crypto ETFs saw some of their largest inflows on record in the days following the election.
In April, bitcoin also saw its fourth “halving”—a preprogrammed event that impacts production by cutting the reward for mining, or the creation of new bitcoin, in half. When that reward falls, so does the number of new bitcoins entering the market. And, if demand remains strong, some analysts say this “supply shock” can also help propel the price long term.
Read more about crypto markets’ reaction to U.S. election results.
