Bitcoin enthusiasts and meme stock traders are abuzz with speculation about another potential Donald Trump presidency, but in reality, they’re just engaging in high-risk, high-reward trades as usual.
Here’s what’s happening: Bitcoin, the world’s largest cryptocurrency, briefly surged to a three-month high, surpassing $68,000 on Wednesday. This spike was driven by a combination of factors, including Trump’s recent post on X (formerly Twitter) claiming that “crypto is the future,” and Vice President Kamala Harris’ remarks on Monday signaling regulatory support for digital assets.
At the same time, shares of Trump Media rebounded from a mysterious 10% drop on Tuesday, continuing its meme stock-like behavior of volatile price swings without clear fundamental reasons. The stock closed Wednesday with a more than 15% gain.
While Bitcoin and Trump Media have little in common, both assets have recently moved in response to traders’ perceptions of Trump’s reelection chances.
It’s important to note that these traders don’t have any special insight — they’re essentially speculating on highly volatile assets with different degrees of sophistication. For crypto traders, the excitement stems from Trump’s apparent reversal on the asset class, which he previously dismissed as a scam. Despite a lukewarm reception and technical issues during the launch of Trump-backed crypto platform World Liberty Financial on Tuesday, the former president has spent months courting industry leaders and crypto enthusiasts.
Trump’s growing lead over Harris on the crypto-focused prediction platform Polymarket has only fueled the momentum. As of Wednesday, Trump held a 59% chance to Harris’ 41%, according to Polymarket predictions — a sharp contrast to national polls, such as CNN’s “Poll of Polls,” which show a much tighter race.
Steph Guild, senior director of investment strategy at Robinhood, believes that as the election draws closer, changes in voting predictions could impact market swings. Bitcoin, in particular, might benefit if Trump’s odds improve, given his perceived pro-crypto stance.
Outside of the political sphere, there are broader economic forces boosting Bitcoin, which serves as a barometer for the crypto industry. Adrian Fritz, global head of research at crypto firm 21shares, points to central banks lowering interest rates globally, which makes riskier assets like cryptocurrency more appealing. Additionally, October, known as #Uptober in the crypto community, has historically been a strong month for digital assets.
“It’s no surprise that crypto has become more politicized,” Fritz says. “But overall, the attention is positive for the industry, regardless of who wins the election.”
Meanwhile, Trump Media is experiencing its own surge in trading activity ahead of the election. The company’s stock has seen rapid turnover in recent days, with all available shares changing hands multiple times over the past week. By contrast, Apple shares typically take more than a year for such turnover to occur.
This extreme volatility, which makes crypto appear stable by comparison, appeals to risk-tolerant traders looking to profit from price swings. As Barron’s journalist Al Root notes, the average holding period for Trump Media shares is just two days. However, professional investors are also getting in on the action, with hedge funds using complex trading strategies to exploit small price differences between Bitcoin’s spot and futures markets, further amplifying trading volumes.
In short, while political events may influence short-term market movements, most of these traders are simply riding the waves of momentum and volatility, not executing so-called “Trump trades.”
