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Bitcoin surges, U.S. bonds fall, prison stocks rise, "Trump trade" dominates overnight market

2024-07-16

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The “Trump deal” became more apparent after Trump was attacked over the weekend.

On Monday, a series of Trump-related assets such as Bitcoin, Trump's own media company, and US prison stocks soared, thanks to his survival from the assassination attempt, and the market's support for Trump soared.


BitcoinThe price has risen sharply for 2 consecutive days and is currently trading at $64,795, the highest level since July.


mainlyTrump is supportive of cryptocurrencies, he has hosted cryptocurrency industry executives at Mar-a-Lago and praised the U.S. Bitcoin mining industry. More importantly, Trump's campaign team also accepted cryptocurrency payments, which is the first time among major U.S. political parties, and it also gives people hope that cryptocurrencies can escape strict regulation.

Grzegorz Dróżdż, a market analyst at cryptocurrency company Conotoxia, noted that Trump's chances of winning have risen significantly, and if he wins the election it will have a "positive impact" on cryptocurrencies. According to data from PredictIt, the implied odds of Trump winning in November soared shortly after the shooting.

Trump's own creationTrump Media & Technology (DJT)The stock price also surged 31.8% at the close of trading on Monday.


Even the share prices of prison operators in the U.S. stock market rose collectively, with Geo Group's share price closing up nearly 10% and CoreCivic's share price rising 8%.


"For prison stocks, Wall Street's expectation is that if Trump wins, he will become more stringent on the border, and prison operators will benefit from that," said Michael O'Rourke, chief market strategist at JonesTrading. "Gun manufacturers' share price increases are more like market noise."

Regarding the "Trump trade" that emerged on Monday, O'Rourke explained that the fact that the presidential candidate was not assassinated was good news in itself, so investors' reaction on Monday was reasonable.

But I don’t think that the US stock market can continue to rise sharply from the current level just because Trump’s chances of winning the election have increased.

In addition, U.S. Treasury yields also rebounded collectively on Monday, and the increased possibility of Trump's re-election as president has led many investors to expect that Trump's tax cuts will push up deficits and inflation, pushing up U.S. Treasury yields, a pattern similar to that after Trump won the election in 2016. Analysts at Rabobank said Monday's "Trump trade" emerged because he is widely seen as pro-business and supportive of cryptocurrencies.