(Bloomberg) -- Sean McNulty frets about not having enough time to work on his bench press. Raagulan Pathy is starting to think about buying an Aston Martin.
From New York to Singapore, cryptocurrency traders large and small are pulling all-nighters and forgoing gym breaks to ride the dizzying rally unleashed by Donald Trump’s election victory. With the records piling up and Bitcoin’s march toward $100,000 talked about as something of a mere formality, crypto is in the grip of a market mania the likes of which it hasn’t seen since 2021.
And back with it is the industry’s penchant for excesses, both on and off the trading floor — even though some who lived through previous bull cycles are trying to exercise a measure of restraint.
“I’ve owned an Aston Martin in the past and I’ve done the fast money when young and dumb,” said Singapore-based Pathy, co-founder of stablecoin service provider KAST. “I’d be lying if I said I didn’t look up Lamborghinis, Aston Martins and other fast cars on websites during this bull run too.”
Pathy, who runs a small crypto hedge fund on the side, is leaning toward buying a car — possibly a white one — from the storied British manufacturer to park at his beachfront apartment in Australia. But he’s not sure it’s the right time to pull the trigger: “I don’t want to jinx it by buying now.”
In Trump, crypto found an ally after two years in the political wilderness following a string of scandals including the implosion of FTX, Sam Bankman-Fried’s exchange. Once a crypto skeptic, Trump campaigned as an industry champion, promising to fire Gary Gensler, the Securities and Exchange Commission chair who oversaw a post-FTX crackdown.
Besides helping send Trump back to the White House, the crypto lobby was hugely successful in getting candidates it backed elected to Congress.
For crypto’s true believers, the implications of the Trump-fueled bull market go far beyond instant profits. Many view it as the ultimate expression of digital assets gaining mainstream acceptance, the next step in a process that kicked off in earnest when spot-Bitcoin ETFs launched in the US in January and began attracting billions of dollars.
The success of those products — the biggest one, BlackRock Inc.’s iShares Bitcoin Trust ETF, has taken in $2.3 billion in November alone — has blurred the lines between crypto and what it sometimes derisively referred to as TradFi, short for traditional finance. For the first time, exposure to top tokens is easily available to the mass retail market through regular brokerage accounts.
“The rally is just getting started,” said Geoff Kendrick, global head of digital assets research at Standard Chartered Plc, who’s sticking to his Bitcoin price targets of $125,000 by Dec. 31 and $200,000 by the end of 2025. “The Trump sweep is going to legitimize digital assets over the next two years,” sending the total value of cryptocurrencies above $10 trillion, he said, up from about $2.9 trillion now.
He pointed to “real-world use cases” like stablecoin transfers, blockchain gaming and tokenization of traditional assets.
McNulty, director of trading at Arbelos Markets in Singapore, spent the past four days glued to his screens to handle nonstop pricing requests from clients of his options trading firm. That left him with no time even to hit his home gym, which is equipped with a squat rack, free weights and a bench press.
“I’ve set a target of 200 kilograms (441 pounds) for my bench press, but now I’ll have to wait for markets to get quiet a bit before I can dial back and restart my routine,” said the 40-year-old, whose personal best is 160 kilograms.
For some investors like Michael Terpin, the time is not right to celebrate a market victory right now.
“I’m not popping the champagne corks quite yet, the best is yet to come,” he said. “We should pass $100,000 by December. At this rate, perhaps even by the end of November.”
Still, while some see potential for further gains ahead, others see risks building.
Bitcoin’s advance to almost $90,000 on Tuesday pushed it into “overbought” territory based on a measure known as Relative Strength Index, according to BRN analyst Valentin Fournier, who expects elevated volatility. “This potential volatility could be amplified by new investors entering at high price points, who may react strongly to any dips,” he said in an email. Bitcoin was down about 1% at just above $87,000 on Tuesday morning in New York, having more than doubled so far this year.
Yet to many diehards, those types of potential price swings are a feature, not a bug, of the crypto markets.
“You seem to be in an aggressive bear market where peripheral participants are calling you an idiot for sticking with it, or insane bull-markets where you’re on the phone all day and you never know who you’ll hear from next,” said Stephane Ouellette, CEO of crypto investment firm FRNT Financial Inc., which has 30 employees. “For those who love trading and a raw free-market environment, there’s simply nothing better.”
--With assistance from Emily Nicolle and Olga Kharif.
©2024 Bloomberg L.P.