Cryptocurrencies and stocks, including Tesla, rallied Monday, picking up where they left off last week in the wake of the President-elect Donald Trump's victory.
The price of bitcoin hit an all-time high of more than $88,000, a rally that started shortly after Trump was declared the winner of the election. That's up from $68,000 — a gain of 27% — just since last Tuesday, Election Day in the U.S.
Year to date, the price of bitcoin has nearly doubled.
Meanwhile, the Dow Jones Industrial Average closed above 44,000 for the first time after it rose another 300 points Monday. That followed a week when it set multiple all-time highs after the race was called for Trump.
The Dow represents more established firms like large banks, which themselves had another strong trading day as investors anticipated that a more favorable regulatory environment will lead to an increase in merger and acquisition activity. Such deals necessarily involve tapping big financial firms to execute.
But it wasn't just larger firms: The Russell 2000 index, which covers publicly traded companies with smaller valuations, hit its highest level since 2021, finishing the day up 1.5%.
“Stock investors are ... thrilled by the regime change to a more pro-business administration promoting tax cuts and deregulation,” Ed Yardeni, a longtime market analyst, wrote in a note Monday.
Leading stocks higher was Tesla, which climbed 9%. CEO Elon Musk is expected to play an influential role in Trump's second term.
Tesla shares have soared nearly 50% since Tuesday on the expectation that the electric car company will benefit from a more favorable regulatory and policy environment. The Destiny Tech100 Fund, a specialized investment vehicle that holds shares of Musk's SpaceX, has climbed 200% since Tuesday, CNBC reported.
Shares in private prisons firms also saw significant gains after Tom Homan, the former acting director of U.S. Immigrations and Customs Enforcement, was named "border czar." Geo Group's stock was up nearly 5% — and it has approximately doubled since Tuesday — while CoreCivic's climbed nearly 7%.
Some have heralded Trump’s election as an especially positive sign for the prices of bitcoin and other cryptocurrencies. He has promised to quash the aggressive stance taken by the current leadership of the Securities and Exchange Commission against cryptocurrency firms and products it has deemed potentially harmful to investors.
Trump has also signaled interest in creating a strategic U.S. reserve of bitcoin and has many crypto-friendly advisers to his incoming administration, including Musk, Robert F. Kennedy Jr. and Vivek Ramaswamy, an entrepreneur who announced last week that he was incorporating bitcoin into his asset management service.
Investors may also be responding to fears that inflation will resurface under Trump after months of price increases' settling in at a more subdued pace. Some investors believe Trump's following through on some of his campaign proposals would ultimately lead to higher prices.
"The likelihood of a pickup in inflation just got even higher — tax cuts, the deportation of immigrants, and tariffs are all likely to push up spending, wages and the price of basic goods," Noelle Acheson, author of a newsletter covering cryptocurrency news, wrote this weekend. "Leaving the political impact of that aside for a second (it could be harsh), it adds to the tailwinds propelling crypto and gold."
Other assets in the cryptocurrency world have also been rallying. Shares in Coinbase, the largest U.S. crypto exchange, were set to rise about 14% Monday. Robinhood, the app-based trading platform that allows for crypto trades, was also set to hit an all-time high.
And Dogecoin, a "meme" cryptocurrency that has mostly become a vehicle for pure investor speculation, has soared more than 160% over the past month.
