Muscat: Bitcoin’s record-breaking rally took the digital asset past $89,000 and lifted the overall value of the crypto market above its pandemic-era peak as traders bet on a boom under President-elect Donald Trump.

The largest token has jumped about 32% since the US election on Nov. 5 and hit an all-time high of $89,599 early on Tuesday. The original cryptocurrency changed hands at $89,165.

Trump has vowed friendlier crypto rules and his Republican Party is tightening its grip on Congress to push through his agenda. Other pledges include setting up a strategic US Bitcoin stockpile and boosting domestic mining of the token.

His stance is a sharp break from a crackdown on the divisive industry by the Securities & Exchange Commission under President Joe Biden’s administration. The shift has energized speculative buying of large and small tokens alike, raising the value of digital assets to about $3.1 trillion, CoinGecko data show.

In the options market, investors are lining up bets that Bitcoin will pass $100,000 as soon as the end of the year, according to data from the Deribit exchange. Meanwhile, software firm MicroStrategy Inc. — the largest publicly-traded corporate holder of Bitcoin outside the exchange-traded fund sector — bought about 27,200 Bitcoin for some $2 billion between Oct. 31 and Nov. 10.

Mohamed Hashad, Chief Market Strategist, at Noor Capital, said that market makers are essential to the functioning of financial markets. They buy and sell securities to provide liquidity, ensuring smooth trading and price discovery. To manage risk, market makers often employ hedging strategies. One such strategy involves selling options contracts, which grant the buyer the right to buy or sell an asset at a specific price on a specific date.

In the case of Bitcoin, market makers have sold a significant number of call options at the $90,000 and $100,000 strike prices. These options grant the buyer the right to purchase Bitcoin at these prices, regardless of the market price. If Bitcoin’s price rises above these levels, the market makers will be obligated to sell Bitcoin to fulfill their option contracts.

Bitcoin in particular has been booming over the past week. Just weeks before the election, Trump promoted a crypto venture, World Liberty Financial, in which several members of the Trump family have roles. The industry poured millions of dollars into the election, with prominent crypto executives, including Tyler and Cameron Winklevoss, the founders of the Gemini crypto exchange, donated large sums to support Trump. A group of super PACs also raised well over $100 million to elect pro-crypto congressional candidates.

Some investors have warned that the markets may be getting ahead of themselves, as Trump has released little concrete detail about what he actually plans to do once in office.

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