The "Trump trade," which comprises of bullish bets in bitcoin (BTC), the dollar index, and bets on higher Treasury yields and lower Mexican peso, is in full swing as the Republican candidate takes a notable lead over Kamala Harris in the presidential race.

Bitcoin, the leading cryptocurrency by market value, surged over 7% during Wednesday's Asian trading hours, setting record highs above $74,000.

The cryptocurrency saw bigger gains in Mexican peso (MXN) terms as the Latin American currency, expected to be hardest hit by Trump's tariffs plans, fell 3% against the USD to 20.7080, reaching the lowest since August 2022. As of writing, the BTC/MXN pair on Binance traded nearly 10% higher at 1.548 million, according to data source TradingView.

The MXN has declined by 27% since March, with most losses stemming from fears that a potential Trump administration would resort to protectionist policies. Early this week, Trump reiterated his intention to impose a 25% tariff on imports from Mexico, one of the U.S.' largest trading partners last year, while warning of a hike to 100% if the country fails to close its border.

"If they don’t stop this onslaught of criminals and drugs coming into our country, I am going to immediately impose a 25 percent tariff on everything they send into the United States of America,” Trump said, according to Washington Post.

“If that doesn’t work, I’ll make it 50, and if that doesn’t work, I’ll make it 75,” he said. “Then I’ll make it 100," Trump added.

Trump has also vowed to renegotiate the United States-Mexico-Canada Agreement (USMCA), due for review on July 1, 2026. At press time, Associated Press showed Trump leading the electoral map 230 to Kamala Harris' 210.

"Mexican Peso is weakening substantially, even before we know what will eventually happen tonight. An indication that we may see very big moves in the event of a Trump win..," Robin Brooks, a senior fellow at the Brookings Institution, said on X.

Gold flat, DXY soars

Gold, rising a recent wave of gains, traded largely unchanged at nearly $2,740 per ounce despite fears that Trump's tariff plan could lead to higher inflation.

The upside in the yellow metal was likely capped by gains in the dollar index, which topped 105.00 for the first time since July 9. The yield on the 10-year Treasury note jumped over 20 basis points to 4.46%, denting the appeal of the zero-yielding safe-haven metal. The uptick in the bond could be attributed to fears that Trump tariffs could complicate the Fed's plans to cut borrowing costs.

Tariffs are known to create a ripple effect throughout the global economy by increasing the cost of goods, disrupting international trade, and reducing competition, all of which add to inflationary pressures.

That said, both bitcoin and gold are said to be on a long-term bullish trajectory, courtesy of the ballooning U.S. fiscal debt. Gold has surged 32% this year, outshining the S&P 500's 21% gain by a big margin. Bitcoin, often touted as digital gold, has risen 75%.

Bitcoin Mexico Gold Dollar index Trump Elections

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.