Will Trump’s burgeoning bromance with Elon Musk spark the rise of Bitcoin by banishing its “Wild West” image?

He was easily the biggest winner from Donald Trump’s surprising return to the White House. Elon Musk, already the richest man in the world, saw his personal wealth rise by $26.5bn (£20bn) the day after the election, as shares in his electric car company Tesla soared with the news.

The tycoon, who also owns the social media platform X and the rocket manufacturer SpaceX, opted for Trump and took the prize. Musk poured $130 million into Trump’s campaign, making appearances at his rallies in key states and flooding X with messages of support to his more than 200 million followers.

In the 24 hours before the poll, Musk tweeted nearly 200 times, racking up nearly a billion views, after averaging 100 posts per day in the month before the vote, according to the Financial Times.

Trump was understandably grateful and effusive in his praise.

‘He’s a character. He’s a special guy. “He is a super genius,” the president-elect said of the magnate in his victory speech.

> How to choose the best stocks and shares Isa and the right DIY investment account

But having made a fortune from his election bet, Musk stands to gain even more from the incoming administration when Trump – a transactional president if ever there was one – returns the favor.

Trump has pledged to give Musk an official role by cutting government spending and bureaucracy as part of a massive deregulation program during his second term in the Oval Office.

That would give the billionaire enormous power and influence over the federal agencies that oversee his vast business empire. The Tesla boss says he will use all the power he has to push, among other things, for federal approval of self-driving cars.

Crucially, Musk has the president-elect’s attention, at least for now. Trump has already done a U-turn on electric vehicles following Musk’s endorsement, and also embraced his ambitions to reach Mars with his SpaceX rockets.

But the recovery can go even further. Musk has joked that he will run a Department of Government Efficiency, or Doge, a nod to Dogecoin, the cryptocurrency he has promoted for years.

The cryptocurrency has become synonymous with the so-called ‘Trump trade’ that drove US stock markets to new peaks after his victory.

Bitcoin, the largest cryptocurrency, hit a record high of nearly $77,000 as its investors toasted its victory. Trump, who once dismissed the digital token as a “scam,” now wants to make the United States “the world’s bitcoin superpower.” He’s even toying with the idea of ​​creating a bitcoin federal reserve, bringing the cryptocurrency into the financial mainstream.

“Such a move would put bitcoin in a similar role to gold, giving it a historic level of legitimacy,” said James Butterfill of crypto asset manager CoinShares, possibly driving its value to new highs.

For that to happen, Trump would have to fire Gary Gensler, chairman of the Securities and Exchange Commission (SEC), which oversees Wall Street and protects investors.

“Trump’s stance toward the SEC and Gensler has been openly critical, especially the regulatory approach to digital assets,” Butterfill said. “His administration is expected to introduce leadership changes that could usher in more cryptocurrency-friendly regulators at the SEC.”

Gensler has filed many lawsuits against crypto projects for allegedly violating securities laws amid accusations from his opponents that he was stifling innovation.

He argued that his job was to protect consumers from collapses like the one that sank crypto exchange FTX in 2022. His boss, Sam Bankman-Fried, was jailed for 25 years for stealing $8 billion in customer deposits.

Gensler also resisted the launch of bitcoin ETFs (exchange-traded funds) that allow bettors to bet on cryptocurrencies without actually owning them. The token’s spectacular gains last week were driven in part by inflows into US ETFs that invest directly in the cryptocurrency.

BlackRock, the world’s largest asset manager, saw its market-leading bitcoin ETF raise more than $1.1 billion on Thursday, marking the highest daily inflow since the $33 billion fund launched in January.

How long the boom will last is anyone’s guess. Critics say Trump’s damascene conversion to cryptocurrencies and his “bromance” with Musk were just part of a plan to win over young voters and secure donations from wealthy “tech bros” for his presidential bid.

If they are right, and if Trump does not deliver on his many promises quickly, the euphoria gripping cryptocurrencies and the stock market in general will soon fade, along with the fortunes made last week.

In the meantime, you’re in for a wild ride.