(Bloomberg) — Bitcoin rose above $71,000 for the first time since June, helped by inflows into dedicated exchange-traded funds as well as speculation about the possible outcome of next week's U.S. election.

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The largest digital asset climbed as much as 2.7% before paring some of the move to change hands at $70,870 as of 5:30 a.m. in London on Tuesday. Smaller tokens like second-place Ether and meme-favorite Dogecoin also saw an upward trend.

Bitcoin is seen by some as a so-called Trump trade because of Republican presidential candidate Donald Trump's embrace of digital assets during the campaign. Trump is ahead in prediction markets, while polls show a neck-and-neck race with Democratic nominee for Vice President Kamala Harris.

The token “continues to price in a Donald Trump election victory,” Tony Sycamore, market analyst at IG Australia Pty, wrote in a note. Bitcoin needs a sustained break above $70,000 to boost confidence that it can rise above March's record high of $73,798, he added.

Trump has vowed to make the US the crypto capital of the planet. Harris has taken a more measured approach and committed to supporting a regulatory framework for the industry. Their positions contrast with a crackdown on the sector under President Joe Biden.

Trump has also said he will ask billionaire Elon Musk – a major donor to his campaign – to lead cuts in government spending. The initiative is nicknamed “Department of Government Efficiency” (DOGE), a reference to the Dogecoin token that Musk adopted.

According to Arisa Toyosaki, co-founder of Cega, a crypto derivatives provider, Musk's connection to the Trump campaign has helped lift spirits among traders.

Options traders have increased their bets that Bitcoin will reach a high of $80,000 by the end of November, regardless of who wins the election. Implied volatility around Election Day on November 5th is elevated. Spot Bitcoin ETFs in the US have attracted around $3.6 billion in net inflows so far this month.

Bitcoin recently weathered reduced bets on Federal Reserve interest rate cuts as well as a report of increased U.S. scrutiny of Tether, a stablecoin that acts as a linchpin in crypto trading. The original cryptocurrency is up 69% in 2024.

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