he 2024 US presidential election concluded with Donald Trump being officially elected as the 47th president. This situation has sent ripples in the financial markets. With Trump leading in electoral votes at 277 against Harris's 226, investors didn't wait; immediate reactions appeared in the cryptocurrency and forex markets: Bitcoin surged to an all-time high of $75,060, while the US dollar surged impressively against other major currencies.
Market Reactions Following Trump's Victory
The results of the election sent the price of Bitcoin soaring, jumping almost 8% in a single day. That jump not only surpassed its previous record of $73,750 back in late October but also brought the virtual currency back into the top ten assets in the world by market capitalization, according to data from Companies MarketCap.
Analysts attributed this jump to an expectation of a more friendly regulatory environment toward digital currencies with the Trump administration. Trump has changed from skepticism about cryptocurrencies to embracing them, a shift that sits well with investors.
The US dollar also reacted strongly, increasing by more than 1% against the euro and over 3% against the Mexican peso.
The dollar strengthened since the market was expecting perhaps inflationary policies from Trump's tax cuts and deregulation strategies to boost the economy. According to the data from the market, this is the dollar's high point against the yen since July, showing robust confidence in Trump's economic plans.
Implications for Financial Markets
The aftershocks from Trump's victory extend beyond digital currencies to broader financial markets. US stock indices climbed, with small-cap stocks outperforming their larger counterparts in relative terms. E-Mini Russell 2000 futures jumped as much as 3% as traders positioned for "America First" policies, mirroring similar trends after the first Trump election in 2016. The equity market rally is at least partly driven by hopes of higher government spending and business-friendly tax reforms.
These were also seen in the US Treasury yields, which attained the bond market levels for the US Treasury 10-year yield at 4.47%, a level not seen since early July, reflecting investors' confidence in economic growth with the addition of concerns about rising inflation. These huge volatility levels reflect the uncertainty usually witnessed after election outcomes, though mostly prevalent when elections are hotly contested.
Over the coming weeks, Trump will have more detailed plans for economic policy, which may continue shaping these dynamics. Also, various developments, particularly in strategic sectors such as technology, finance, and energy, would be keenly watched by investors and analysts for unfolding in a post-election scenario to define the longer-term implications of this election for the US economy and the rest of the world.
