Bitcoin surges, prison stocks rise as "Trump trade" dominates overnight market
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Bitcoin surges, prison stocks rise as "Trump trade" dominates overnight market
The fact that the presidential candidate was not assassinated is good news in itself, and investors' reaction on Monday was reasonable.
Navigating Web3 tides with focused insightsAuthor: Huang Yu
Source: Wall Street Insights
After the weekend attack on Trump, the "Trump trade" has become more evident.
On Monday, a series of Trump-related assets surged, including Bitcoin, Trump's own media company, and U.S. prison stocks—thanks to his survival of the assassination attempt and the subsequent spike in market confidence in Trump's re-election prospects.
Bitcoin prices rose for two consecutive days, currently trading at $64,795—the highest level since July.
This is mainly because Trump has expressed support for cryptocurrencies. He previously hosted cryptocurrency industry executives at Mar-a-Lago and praised the U.S. Bitcoin mining sector. More importantly, Trump’s campaign team has accepted cryptocurrency donations—a first among major U.S. political parties—raising hopes that cryptocurrencies may escape strict regulation.
Grzegorz Dróżdż, market analyst at cryptocurrency firm Conotoxia, pointed out that Trump’s chances of victory have significantly increased, and if he wins the election, it would have a "positive impact" on cryptocurrencies. According to data from PredictIt, shortly after the shooting incident, the implied odds of Trump winning in November surged sharply.
Trump Media & Technology Group (DJT), the company founded by Trump himself, also saw its stock soar 31.8% by Monday’s close.
Even U.S. prison operator stocks rallied collectively, with Geo Group shares closing up nearly 10% and CoreCivic rising 8%.
Michael O'Rourke, chief market strategist at JonesTrading, said: "For prison stocks, Wall Street expects that if Trump wins, he will take a tougher stance on border issues, benefiting prison operators. Meanwhile, the rise in gun manufacturer stocks appears more like market noise."
Regarding Monday's "Trump trade" rally, O'Rourke explained: "The fact that a presidential candidate survived an assassination attempt is itself good news, so investor reactions on Monday were reasonable."
"But I don't believe that just because Trump's odds of winning have risen, U.S. stocks can continue rising significantly from current levels."
U.S. Treasury yields also rebounded collectively on Monday. With growing expectations of a Trump re-election, many investors anticipate his tax-cut policies will widen deficits and fuel inflation, thereby pushing up bond yields—a pattern similar to what followed Trump’s 2016 victory. Analysts at Rabobank noted that Monday’s "Trump trade" emerged due to the widespread perception that Trump is business-friendly and supportive of cryptocurrencies.
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