Bitcoin surged to new highs on five of the last seven days since the US election, with total cryptocurrency market capitalisation hitting US$3 trillion this week, the first time since November 2021, according to Binance Australia's Monthly Crypto Market Wrap.
October lived up to its nickname 'Uptober' for cryptocurrencies, as the total market cap climbed 2.8% and Bitcoin gained 7.4%, driven by renewed institutional interest, US$5.5 billion in crypto exchange-traded fund (ETF) inflows and growing speculation around the US presidential election.
Since election day, Bitcoin's price has soared nearly 20%, reaching a record-breaking US$88,000 on Tuesday, November 12.
Ether (ETH) also saw substantial gains, climbing 30%. Binance reported two consecutive billion-dollar inflow weeks, with net inflows in November surpassing US$5 billion, as per DeFiLlama. The day following the election saw Binance log more than 13 million app visits in a single day.
Bitcoin's correlation with the S&P 500 is now approaching record highs, signalling a shift in investor sentiment, as it is increasingly perceived both as a risk-on asset and a hedge against macroeconomic uncertainties.
Although historically weak, Bitcoin's equity correlation has seen brief spikes often linked to liquidity or interest rate changes; however, the longevity of this trend remains to be seen.
"Increased inflows and greater user engagement following the US election further emphasises the industry’s expanding role as a mainstream financial asset,” said James Quinn-Kumar, director of Community Engagement for Binance Australia.
"Crypto investors are clearly positive about the role of crypto as an investment option and a store of wealth. We are seeing this enthusiasm spread beyond just Bitcoin into altcoins and memecoins too.”
The memecoin rally
Memecoins also showed strong performance in October, with four out of the top five tokens by performance being meme-based. DOGE led the pack, surging 33.1% after Elon Musk referenced the "Department of Government Efficiency" (D.O.G.E.) during Donald Trump's rally in New York. This global trend resonated with Australian investors, resulting in a 2.5x monthly increase in local DOGE users.
The market share of memecoins among the top 50 altcoins by market cap has steadily climbed, doubling from roughly 6% at the start of 2024 to over 12%, with peaks reaching 20% on certain days. Memecoins have averaged US$5 billion in daily trading volume since February.
Solana has emerged as the dominant platform for new token launches, capturing a record 90.6% of all new tokens in the week ending October 21, driven by the launch of the memecoin launchpad pump.fun. This surge in memecoins has fuelled speculative activity, drawing attention to the Solana network’s ease of token creation.
“The rise of memecoins has been nothing short of spectacular to behold,” Quinn-Kumar said. “In many aspects, memecoins embody the fundamental principles of the cryptocurrency industry - fairness, transparency, decentralisation.
"As crypto investing becomes mainstream they present a unique opportunity to bring community to investing and engage the next generation of investors.”
Do your research
Quinn-Kumar also said investors should not rush in without doing their own research and understanding the potential risks.
“Crypto as with every other market is cyclical and factors like macroeconomics changes, regulatory development or shifting investor sentiment can prompt new cycles of boom and bust.
"Crypto is also more volatile than traditional markets which is why it is so important investors stay informed of the risks and do not invest beyond their means.”