Asian stocks slide as Bitcoin hits record high amid Trump euphoria

Asian stocks eased on Tuesday, while the dollar held near a four-month high. The spotlight, however, was on bitcoin, which surged to a record high of $89,637. Investor optimism surrounding Donald Trump’s potential second term fueled the cryptocurrency’s rally. Many expect his presidency to bring tax cuts and deregulation, benefiting assets like bitcoin.

The euro, however, faced pressure, dropping to near seven-month lows as concerns about possible tariffs from a new U.S. administration mounted. The single currency touched $1.0687 overnight and stood at $1.0658 in early Asian trading. Meanwhile, the dollar is expected to gain from policies that could keep U.S. interest rates elevated. The dollar index remained strong at 105.57, just below the four-month high reached on Monday.

Vasu Menon, managing director of investment strategy at OCBC, noted that Trump’s decisive victory removed election uncertainties. However, he cautioned that aggressive tariff hikes could increase inflation and deter rate cuts by the Federal Reserve, potentially causing retaliatory measures from trading partners. “Trump’s victory has unleashed the animal spirit in markets for now,” Menon added.

On the Asian stock front, MSCI’s index of Asia-Pacific shares outside Japan dropped 1%. Taiwan’s stocks fell 2%, and South Korean shares slipped 1%. Chip stocks were hit hard after reports that the U.S. ordered Taiwan Semiconductor to halt shipments of advanced chips to China, affecting AI applications. In contrast, Japan’s Nikkei rose 0.5%, supported by a weak yen, which hovered near a three-month low at 153.93 per dollar.

U.S. markets set record highs overnight, with Tesla gaining 9% after reaching a $1 trillion market value. Trump’s win, along with the election of pro-crypto candidates, has boosted the bitcoin rally, which is now targeting $100,000.

Meanwhile, Chinese stocks saw modest gains, while Hong Kong dropped 1%. Investor sentiment remained cautious after China’s latest stimulus package failed to meet expectations for direct consumer spending.

Looking ahead, U.S. inflation data due Wednesday and comments from Federal Reserve officials, including Chair Jerome Powell, will be closely watched. Markets are pricing in an 87% chance of a 25-basis-point rate cut in December.

In commodities, oil prices remained steady, with Brent crude at $71.88 per barrel and WTI at $68.10. Gold was flat at $2,624 per ounce after dropping to a one-month low on Monday.