Bitcoin neared $90,000 in a new record high. What to know about crypto's post-election rally

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Bitcoin neared $90,000 in a new record high. What to know about crypto's post-election rally

2024-11-13 06:47 Last Updated At：06:51

NEW YORK (AP) — As money continues to pour into crypto following Donald Trump's reelection last week, bitcoin has climbed to yet another record high.

The world's largest cryptocurrency topped $89,000 for the first time, briefly peaking at $89,995 early Tuesday, according to CoinDesk. Bitcoin's price oscillated throughout the day, but is still up more than 27% over the last week — standing at about $88,288 as of 5 p.m. ET.

That's part of a rally across cryptocurrencies and crypto-related investments since Trump won the U.S. presidential election. Analysts credit much of the recent gains to an anticipated “crypto-friendly” nature of the incoming administration, which could translate into more regulatory clarity but also leeway.

Still, as with everything in the volatile cryptoverse, the future is hard to predict. And while some are bullish, others continue to warn of investment risks.

Here's what you need to know.

Cryptocurrency has been around for a while now, but has come under the spotlight in recent years.

In basic terms, cryptocurrency is digital money. This kind of currency is designed to work through an online network without a central authority — meaning it's typically not backed by any government or banking institution — and transactions get recorded with technology called a blockchain.

Bitcoin is the largest and oldest cryptocurrency, although other assets like Ethereum, Tether and Dogecoin have gained popularity over the years. Some investors see cryptocurrency as a “digital alternative” to traditional money — but it can be very volatile, and reliant on larger market conditions.

A lot of the recent action has to do with the outcome of last week's election.

Trump was previously a crypto skeptic, but changed his mind and embraced cryptocurrencies during this year's presidential race. He has pledged to make the U.S. “the crypto capital of the planet” and create a “strategic reserve” of bitcoin. His campaign accepted donations in cryptocurrency and he courted fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.

Crypto industry players welcomed Trump’s victory, in hopes that he would be able to push through legislative and regulatory changes that they’ve long lobbied for. And Trump had previously promised that, if elected, he would remove the chair of the Securities and Exchange Commission, Gary Gensler, who has been leading the U.S. government’s crackdown on the crypto industry and repeatedly called for more oversight.

“Crypto rallied as Election Day progressed into the night and as it became increasingly clear that Trump would emerge victorious,” Citi analysts David Glass and Alex Saunders wrote in a Friday research note, pointing to larger industry sentiment around Trump being “crypto-friendly" and a potential shift in regulatory backing.

But even before the post-election rally, assets like bitcoin posted notable gains over the past year or so. Much of the credit goes to early success of a new way to invest in the asset: spot bitcoin ETFs, which were approved by U.S. regulators in January.

Inflows into spot ETFs, or exchange-traded funds, "have been the dominant driver of Bitcoin returns from some time, and we expect this relationship to continue in the near-term,” Glass and Saunders noted. They added that spot crypto ETFs saw some of their largest inflows on record in the days following the election.

In April, bitcoin also saw its fourth “halving” — a preprogrammed event that impacts production by cutting the reward for mining, or the creation of new bitcoin, in half. When that reward falls, so does the number of new bitcoins entering the market. And, if demand remains strong, some analysts say this “supply shock” can also help propel the price long term.

Crypto assets like bitcoin have a history of drastic swings in value — which can come suddenly and happen over the weekend or overnight in trading that continues at all hours, every day.

In short, history shows you can lose money as quickly as you've made it. Long-term price behavior relies on larger market conditions.

At the start of the COVID-19 pandemic, bitcoin stood at just over $5,000. Its price climbed to nearly $69,000 by November 2021, in a time marked by high demand for technology assets, but later crashed during an aggressive series of Federal Reserve rate hikes aimed at curbing inflation. Then came the 2022 collapse of FTX, which significantly undermined confidence in crypto overall.

At the start of last year, a single bitcoin could be had for less than $17,000. Investors, however, began returning in large numbers as inflation started to cool — and gains skyrocketed on the anticipation and then early success of spot ETFs. While some crypto supporters see the potential for more record-breaking days, experts still stress caution, especially for small-pocketed investors.

“Investors should only dabble in crypto with money that they can be prepared to lose,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said last week. “Because we’ve seen these wild swings in the past.”

Assets like bitcoin are produced through a process called “mining," which consumes a lot of energy. And operations relying on pollutive sources have drawn particular concern over the years.

Recent research published by the United Nations University and Earth’s Future journal found that the carbon footprint of 2020-2021 bitcoin mining across 76 nations was equivalent to the emissions from burning 84 billion pounds of coal or running 190 natural gas-fired power plants. Coal satisfied the bulk of bitcoin’s electricity demands (45%), followed by natural gas (21%) and hydropower (16%).

In the U.S., the Energy Information Administration notes that crypto mining across the country has “grown very rapidly over the last several years," adding that grid planners have begun to express concern over increases in related electricity demand. Preliminary estimates released by the EIA in February suggest that annual electricity use from crypto mining probably represents between 0.6% to 2.3% of U.S. electricity consumption.

Environmental impacts of bitcoin mining boil largely down to the energy source used. Industry analysts have maintained that clean energy has increased in use in recent years, coinciding with rising calls for climate protections from regulators around the world.

AP Business Writer Kelvin Chan contributed to this report from London.

FBI says driver in New Orleans rampage acted alone, was '100%' inspired by Islamic State group

2025-01-03 02:37 Last Updated At：02:42

NEW ORLEANS (AP) — The U.S. Army veteran who drove a pickup truck into a crowd of New Year’s revelers acted alone, the FBI said Thursday, reversing its position from a day earlier that he likely worked with others in the deadly attack that officials said was inspired by the Islamic State group.

The FBI also revealed that the driver, Shamsud-Din Jabbar, a U.S. citizen from Texas, posted five videos on his Facebook account in the hours before the attack in which he proclaimed his support for the militant group and previewed the violence that he would soon unleash in the city's famed French Quarter district.

“This was an act of terrorism. It was premeditated and an evil act,” said Christopher Raia, the deputy assistant director of the FBI's counterterrorism division, calling Jabbar “100% inspired” by the Islamic State.

The attack killed 14 revelers, along with Jabbar, who was fatally shot in a firefight with police after steering his speeding truck around a barricade and plowing into the crowd.

It was the deadliest IS-inspired assault on U.S. soil in years, laying bare what federal officials have warned is a resurgent international terrorism threat. That threat is emerging as the FBI and other agencies brace for dramatic leadership upheaval after President-elect Donald Trump's administration takes office.

Seeking to assuage concerns about any broader plots, Raia stressed that there was no indication of a connection between the New Orleans attack and a Tesla Cybertruck explosion Wednesday outside Trump’s Las Vegas hotel.

The FBI continued to hunt for clues, but said that 24 hours into its investigation, it was now confident that the 42-year-old Jabbar was not aided by anyone else in the attack, which killed an 18-year-old aspiring nurse, a father of two and a former Princeton University football star.

Officials have reviewed surveillance video showing people standing near an improvised explosive device that Jabbar placed in a cooler along the city's Bourbon Street, where the attack occurred, but authorities “do not believe at this point these people are involved ... in any way,” Raia said.

Investigators were also trying to understand more about Jabbar's path to radicalization, which they say culminated with him picking up a rented truck in Houston on Dec. 30 and driving it to New Orleans the following night.

The FBI recovered a black Islamic State flag from his rented pickup and reviewed five videos posted to Facebook, including one in which he said he originally planned to harm his family and friends, but was concerned that news headlines would not focus on the “war between the believers and the disbelievers,” Raia said. He also left a last will and testament, the FBI said.

Jabbar joined the Army in 2007, serving on active duty in human resources and information technology and deploying to Afghanistan from 2009 to 2010, the service said. He transferred to the Army Reserve in 2015 and left in 2020 with the rank of staff sergeant.

Abdur-Rahim Jabbar, Jabbar's younger brother, told The Associated Press on Thursday that it “doesn’t feel real” that his brother could have done this.

“I never would have thought it’d be him,” he said. “It’s completely unlike him.”

He said that his brother had been isolated in the last few years, but that he had also been in touch with him and he didn’t see any signs of radicalization.

“It’s completely contradictory to who he was and how his family and his friends know him,” he said.

In New Orleans on Thursday, a still-reeling city inched back toward normal operations. Authorities finished processing the scene early in the morning, removing the last of the bodies, and Bourbon Street was set to reopen at some point later in the day, according to an official familiar with the matter who spoke on condition of anonymity to the AP.

The Sugar Bowl college football game between Notre Dame and Georgia, initially set for Wednesday night and postponed by a day in the interest of national security, was still on for Thursday. The city planned to host the Super Bowl next month.

“This is one of the safest places on earth," Louisiana Gov. Jeff Landry said. "It doesn’t mean that nothing can't happen.”

Tucker reported from Washington, and Mustian reported from Black Mountain, North Carolina. Associated Press reporters Stephen Smith, Chevel Johnson and Brett Martel in New Orleans; Jeff Martin in Atlanta; Alanna Durkin Richer, Tara Copp and Zeke Miller in Washington; Darlene Superville in New Castle, Delaware; Colleen Long in West Palm Beach, Florida; and Michael R. Sisak in New York contributed to this report.