Bitcoin races past $100,000, fueled by post-election rally

The price of bitcoin surpassed $100,000 for the first time on Wednesday, soaring to a fresh high as the world's largest cryptocurrency extended a rally set off by the election of former President Donald Trump.

Bitcoin has climbed more than 40% since Election Day, when voters opted for a candidate viewed as friendly toward digital currency.

Those gains have far outpaced the stock market. The S&P 500 has increased about 2.4% over that period, while the tech-heavy Nasdaq has jumped 2.6%.

On the campaign trail, Trump vowed to bolster the cryptocurrency sector and ease regulations enforced by the Biden administration. Trump also promised to establish the federal government's first National Strategic Bitcoin Reserve.

Trump said he would replace Securities and Exchange Commission Chair Gary Gensler, whom many crypto proponents dislike for what they perceive as a robust approach to crypto regulation.

Gensler announced that he plans to resign on Jan. 20, 2025, the date of Trump's inauguration.

The post-election euphoria has lifted other parts of the crypto sector. Ethereum, the second-largest cryptocurrency, has climbed 27%. Lesser-known dogecoin has skyrocketed about 140%, while litecoin has surged 35%.

Shares of Coinbase, a top crypto trading platform, have increased more than 70% since Trump's reelection.

The growth in recent weeks extends a remarkable turnabout for the once-beleaguered crypto industry. The sector entered this year bruised after a series of high-profile collapses and company scandals.

FTX, a multibillion-dollar cryptocurrency exchange co-founded by Sam Bankman-Fried, collapsed in November 2022. The implosion set off a 17-month legal saga that resulted in the conviction of Bankman-Fried for fraud. In April, Bankman-Fried was sentenced to 25 years in prison.

Changpeng Zhao, the founder and former CEO of major cryptocurrency exchange Binance, was sentenced to four months in prison in April after pleading guilty to charges that his platform had enabled illicit financial activity.

The reelection of Trump marks the latest in a series of positive developments that have buoyed cryptocurrency this year.

Those gains have been propelled, in part, by U.S. approval in January of bitcoin ETFs, or exchange-traded funds. Bitcoin ETFs allow investors to buy into an asset that tracks the price movement of bitcoin, while avoiding the inconvenience and risk of purchasing the crypto coin itself.

Last month, options on BlackRock's popular iShares Bitcoin Trust ETF (IBIT) were made available for trading on the Nasdaq. The options, which provide a new avenue for bitcoin investors, allow individuals to commit to buy or sell the ETF at a given price by a specific date. While such investments typically come with additional risk, they can also make large payouts.

IBIT inched upward 1% on Friday, reaching a record high of about $56.

Bryan Armour, the director of passive strategies research at financial firm Morningstar, attributed the recent crypto surge to investors' anticipation of friendly policy under Trump, as well as the newly available options trading for bitcoin ETFs.

Still, the performance of cryptocurrencies, including bitcoin, has proven volatile, Armour added. The price of bitcoin could fall, especially if Trump encounters difficulty following through on his campaign commitments, he said.

"As long as the narrative stays positive, there's always room to grow," Armour told ABC News before bitcoin reached $100,000. "I also think campaign promises don't always come to fruition."

"It's still a highly volatile asset," Armour added.