U.S. shares reached record highs on Wall Street, and the dollar experienced its largest gain in eight years following Donald Trump’s historic victory in the presidential election. The cryptocurrency Bitcoin also soared to an all-time high, buoyed by Trump’s commitment to prioritize the often-volatile digital currency.
Despite the optimistic market response, investors are wary of potential consequences stemming from Trump’s proposed tax cuts and increased tariffs, which could lead to higher inflation and a slowdown in interest rate reductions. The prospect of prolonged higher interest rates suggests that investors may see improved returns on their dollar-denominated savings and investments.
Market reactions indicate a mix of enthusiasm and caution, as stakeholders navigate the implications of Trump’s policies on the economy. While the stock market and dollar strength signal confidence in the business environment, concerns about inflationary pressures and the potential impact on monetary policy remain at the forefront of investors’ minds. This complex landscape reflects the intricate balance between opportunities and challenges that the new administration may present for the U.S. economy moving forward.
The value of Bitcoin jumped by more than $6,600 (£5,120) to an all-time high of $75,999.04.
Trump’s stance on crypto stands in stark contrast with that of the Biden administration, which has led a sweeping crackdown on crypto firms.
He pledged to make the US “the bitcoin superpower of the world”.
During the election campaign, Trump had suggested that he could fire Gary Gensler, the chair of US regulator the Securities and Exchange Commission, who has taken legal action against several crypto firms.
