On Tuesday, the value of bitcoin surged past $72,000 as market participants speculated on the results of the upcoming US presidential election.

The cryptocurrency experienced a 3.9 percent increase, reaching a six-month peak of $72,784.40 in New York, moving closer to its all-time high of nearly $74,000 recorded in March.

Bitcoin is often referred to as a “Trump trade” due to the Republican candidate’s commitment to establishing the United States as the global leader in bitcoin if he secures reelection.

Despite polls indicating a tight race between Trump and the Democratic nominee Kamala Harris, the financial markets seem to favour a potential Trump victory.

Previously referring to bitcoin as a “scam,” Trump has shifted his stance and is actively courting cryptocurrency investors during his campaign, promising to remove SEC chairman Gary Gensler, who has been enforcing regulations on digital currency fraud.

Proponents of bitcoin argue that the cryptocurrency acts as a safeguard against inflation, given that the maximum supply is capped at 21 million coins, with over 19 million already mined.

A Trump administration is anticipated to be inflationary, primarily due to proposed tariffs on imported goods. Trump has mentioned instituting a blanket 20 percent tariff on all foreign products and a more substantial 60 percent tariff on goods from China, although he disputes that such tariffs would lead to increased inflation.

Kamal Harris has also shown her support for cryptocurrencies, referring to them as key to future industries in her recent economic plans. Her team has been reaching out to crypto companies to foster better relations.

Tony Sycamore, a market analyst at IG Australia, noted that bitcoin’s price appears to reflect expectations of a Trump win, alongside an uptick in investment towards bitcoin exchange-traded funds (ETFs).

Ryan Lee, chief analyst at Bitget Research, commented, “Both candidates have shown a dedication to establishing clearer regulatory frameworks for digital assets, with Trump specifically seeking endorsements from the cryptocurrency sector.

“This political backdrop has amplified positive market sentiments, enhancing bitcoin’s upward momentum,” he added, as reported by Barron’s.

Other cryptocurrencies have experienced gains as well, such as ether, which rose by 3.9 percent to $2,667 by midday in New York.