Bitcoin’s price soared past $72,000 on Tuesday, reaching a six-month high as investors speculated on the outcome of the US presidential race.

Trading in New York saw the cryptocurrency climb 3.9 per cent to $72,784.40, edging closer to its record peak of nearly $74,000 set in March.

The recent rally is widely attributed to what analysts have dubbed a “Trump trade.” Republican candidate Donald Trump has vowed to position the United States as “the bitcoin superpower of the world” should he return to the White House. This pledge has galvanised crypto investors, many of whom view Trump’s potential re-election as bullish for digital assets.

While Trump and Democratic candidate Kamala Harris remain neck and neck in the polls, market sentiment appears to be swaying towards a Trump victory. Trump, who previously dismissed bitcoin as a “scam,” has pivoted to actively courting the cryptocurrency sector, promising to fire Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), who has been vocal in his crackdown on crypto fraud.

Bitcoin proponents argue that the cryptocurrency serves as a hedge against inflation, given its fixed supply cap of 21 million coins, with over 19 million already in circulation. A Trump presidency is anticipated to carry inflationary implications due to proposed tariffs on foreign goods, including a universal 20 per cent tariff and a potential 60 per cent tariff on Chinese imports. However, Trump contends these tariffs will not drive inflation.

Kamala Harris, the Democratic nominee, has also expressed support for digital currencies, describing cryptocurrency as central to the “industries of the future” in her recent economic strategy. Her campaign has been in dialogue with crypto firms, indicating her openness to working with the sector.

Market analyst Tony Sycamore from IG Australia commented that bitcoin’s current price surge reflects investor optimism around a Trump victory. Meanwhile, Ryan Lee, chief analyst at Bitget Research, remarked that both Trump and Harris are inclined towards a clear regulatory environment for digital assets, although Trump’s vocal advocacy has further fuelled market optimism.

Investor interest has also buoyed other digital currencies. Ether, the second-largest cryptocurrency by market capitalisation, saw a 3.9 per cent uptick, trading at $2,667 in New York on Tuesday.

Overall, bitcoin’s recent performance underscores the impact of political developments on cryptocurrency markets, with many investors poised to monitor election outcomes closely in the weeks ahead.