Trump Media & Technology Group Corp. (DJT) saw a 36% surge, and cryptocurrency ETFs climbed on Monday following a weekend shooting incident that left former President Donald Trump with an injured ear.
The largest spot bitcoin ETF, the Blackrock Bitcoin Trust (IBIT), rose by 10%, and the futures-based ProShares Ether Strategy ETF (EETH) jumped 9% by midday trading. Known as a pro-crypto candidate compared to President Joe Biden, Trump’s election prospects are now seen as pivotal for the cryptocurrency market. Bitcoin (BTC) has rallied 7% since the failed assassination attempt on Saturday in Butler, Pennsylvania.
Trump survived the shooting at the rally, an event that has shaken the country. The incident has been attributed to 20-year-old Thomas Matthew Crooks and has prompted calls for unity from both Democratic and Republican leaders. The Republican Convention, where Trump is expected to secure the Republican nomination, kicked off in Milwaukee today.
What Is the ‘Trump Trade’?
The “Trump Trade” refers to market movements and investor behaviors in response to the economic policies and political actions associated with a Donald Trump presidency. This term became notable after his election in November 2016 when markets reacted to his promises of deregulation, tax cuts, and increased infrastructure spending.
During Trump’s previous presidency, the Trump Trade led to a rally in U.S. equities, especially in the technology and financial sectors, rising Treasury yields, tightening corporate bond spreads, a stronger U.S. dollar, and a surge in industrial metals.
A Trump victory in 2024 might imply that the Federal Reserve will remain cautious about cutting interest rates, as a pro-business environment could re-accelerate the American economy and increase inflation. The Trump Trade encourages investors to increase exposure to domestic equities, favor shorter-duration bonds, implement hedging strategies against a strong dollar, and diversify into safe-haven assets.
In the current election cycle, the Trump Trade has broadened to include the cryptocurrency market and his media company’s stock.
Trump, Crypto ETFs, and DJT Stock
In June, Trump met with Bitcoin miners and later posted on his Truth Social account that Bitcoin mining might be “our last line of defense against a CBDC,” referring to a central bank digital currency. He also expressed his desire for all remaining Bitcoin to be “MADE IN THE USA!!!”
BTC, ETH, and crypto ETF prices have generally followed investor sentiment and expectations of a Trump win in November. Crypto investors are also anticipating Trump’s headliner role in the upcoming Bitcoin Conference 2024, scheduled to take place in Nashville, TN, from July 25 to 27.
DJT stock has surged 75% this year, driven primarily by retail investors betting on a Trump win in the Nov. 5 presidential election rematch against President Biden.
Trump ETFs
There are 26 ETFs with DJT stock as a holding, but only one, the VanEck Social Sentiment ETF (BUZZ), holds as much as 2% exposure to Trump’s media company. The next highest allocation weight is Global X Social Media ETF (SOCL) with 0.54% DJT stock, while the other 24 funds have 0.1% or lower exposure.
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