Bitcoin hits new record as investors pile into ‘Trump trades’

In today’s newsletter:

• Investors pile into ‘Trump trades’

• China’s latest stimulus package disappoints investors

• How Elon Musk could shape Trump’s presidency

Good morning. Investors betting that Donald Trump’s incoming administration will be a boon for the cryptocurrency industry drove the price of bitcoin to a new record yesterday, while the US dollar advanced to a four-month high.

The world’s largest cryptocurrency, which has hit a series of record highs since last week’s election, surged more than 10 per cent to surpass $88,000 for the first time.

The Trump administration is expected to be supportive of the crypto industry and, with likely control of both chambers of Congress, would have greater power to enact favourable legislation.

“Markets are in euphoria territory right now,” said Drew Pettit, director of US equity strategy with Citi. “The optimists are winning by thinking that Trump will be market- and economy-friendly. They are skipping the argument that bad things may happen.”

Bitcoin was just one of the assets that jumped in continued market elation following the former president’s victory last week — read more on the “Trump trades” that investors are piling into.

Here’s what else we’re keeping tabs on today:

• Economic data: India publishes October inflation data.

• Indonesia: Following his state visit to China, new President Prabowo Subianto will meet US counterpart Joe Biden at the White House.

• Airshow China: The biennial aerospace trade show opens in Zhuhai, which will showcase the latest Chinese and Russian fighter jets.

• Results: SoftBank and Tokyo Electron report earnings.

Five more top stories

1. Hong Kong stocks fell yesterday after a fiscal stimulus package announced by authorities last week to help shore up China’s economy underwhelmed investors. Here’s why the $1.4tn plan failed to excite.

2. Shigeru Ishiba has been confirmed as Japan’s prime minister, winning a vote in parliament despite a general election defeat that leaves him as one of the country’s weakest leaders in decades. Ishiba’s Liberal Democratic party lost its parliamentary majority in October’s election, leaving it dependent on the acquiescence of small opposition parties to govern.

3. Brussels is changing its spending policies to potentially redirect tens of billions of euros to defence and security. The policy shift comes as Russia’s war in Ukraine and Donald Trump’s return to the White House heap pressure on the EU to boost investment.

4. A deal to launch multibillion-dollar carbon markets governed by UN rules on emissions has been agreed at the COP29 climate summit, which began yesterday in Azerbaijan’s capital Baku. The symbolic negotiating breakthrough came as US President Joe Biden’s top climate adviser conceded action to limit global warming “may be put on the back burner” after Donald Trump’s return to the White House.

• China’s cleantech boom: The country’s green energy success is fuelling its confidence in climate diplomacy and helping Beijing push back against western political pressure.

• Opinion: Should a petrostate be allowed to host a COP? Pilita Clark weighs in on the debate as the climate conference kicked off in oil- and gas-rich Azerbaijan.

5. Shares of gold producer Resolute Mining plunged yesterday after the company said its chief executive Terence Holohan and two other employees had been detained in Mali. The executives were in the capital Bamako to discuss with officials “open claims made against Resolute” that the group “maintains are unsubstantiated”, said Resolute, which is listed in Sydney and London. Here are more details.

News in-depth

Elon Musk has a unique chance to shape the US presidency by placing his acolytes and allies inside the incoming administration. Today’s deep dive looks at how the world’s richest man is preparing to wield new power in Washington.

We’re also reading . . . 

• Trump’s European allies: The continent’s populist nationalists think history is turning in their direction. But there are tensions just beneath the surface, writes Gideon Rachman.

• Weight loss drugs: Hannah Murphy explains how adverts for anti-obesity medications took over social media and why experts are troubled.

• New titans of Wall Street: From cleaning up after Lehman Brothers to early bets on bitcoin, Chicago trading firm DRW has become an industry colossus.

Chart of the day

Lingering consumer anger over high prices is hurting governments in advanced economies even though inflation is subsiding to normal levels, as a once-in-a-generation surge in costs leaves a toxic legacy for incumbent politicians.

Take a break from the news

Lululemon’s “little black stretchy pants” turned the athleisure brand into a status symbol for women of a certain socio-economic tribe who drank matcha, practised yoga and had a high disposable income, writes Grace Cook. But can Lulu win men over?