Trump Assassination Attempt: Bitcoin Soars as Markets Expect Short-Term Boost

Trump Assassination Attempt: Bitcoin Soars as Markets Expect Short-Term Boost

The failed assassination of former president Donald Trump over the weekend is expected to give U.S. stocks a short-term boost, as analysts believe it increases the likelihood of his re-election in November.

Markets React with Relative Optimism

U.S. futures rose overnight as investors reacted with "relative optimism" to the prospect of a second Trump presidency, according to Rob Casey, partner at markets advisory firm Signum Global Advisors. Crypto markets also rallied, with bitcoin surging as much as 5% on Monday to top $63,000, driven by hopes of a more favorable landscape for digital assets under a Trump administration.

Trump's Re-election Odds Rise

Analysts believe the attempted assassination increases Trump's chances of winning the presidential election. Brian Gardner, chief Washington policy strategist at Stifel, wrote in a Sunday note: "We think investors will agree with our assessment that the attempted assassination of Donald Trump increases his odds of winning the presidential election." Polls showed Trump retaining his lead over President Joe Biden a day after the shooting at a Republican rally in Pennsylvania, and betting odds surged.

Short-Term Boost, Long-Term Uncertainty

While the assassination attempt is expected to provide a short-term boost to markets, analysts remain cautious about the long-term impact. Guillaume Menuet, head of investment strategy and economics for EMEA at Citi Global Wealth, believes the events will drive markets for a "couple of days" before investor attention shifts back to the real economy. With more than three months until the election, Casey said it is too soon to assess the longer-term market impact, given the potential for political volatility in the coming months.

Potential Impact of a Trump Victory

Veteran investor David Roche, president of Quantum Strategy, predicts that a Trump presidency would be bad news for markets due to his protectionist geopolitical stance. He believes Trump's policies could lead to higher U.S. inflation and a slowdown in growth, ultimately ending the bull market. Nomura's Gareth Nicholson agrees, stating that a Trump presidency would be a "negative risk factor" for Asian stocks. Goldman Sachs also forecasts that European markets would face fresh trade policy uncertainty under a new Trump administration.

The Aftermath

One person was killed and two others were critically injured during the attack. Both Trump and Biden called for calm and unity amid concerns of rising political divisions and potential for further violence.