US Presidential Election Heats Up BTC Price With Expectations of Trump Win

Key Points:

• Bitcoin rose 4.3% to $71,450 amid the US presidential election, with its 2024 gains surpassing traditional assets.
• Traders link Bitcoin’s rise to favourable early results for pro-crypto candidate Donald Trump, who has pledged to make the U.S. a crypto hub.

Bitcoin jumped 4.3% to $71,450, notching the biggest gain in a week, amid trader attention to the unfolding results of a hotly contested US presidential election.

Read more: US Presidential Election Drives Bitcoin Price Back to $70,000

Bitcoin Surges Amid US Presidential Election Tensions

The race pits Republican nominee and digital asset advocate Donald Trump against Democrat Kamala Harris, who previously served as vice president during a period of regulatory scrutiny on the crypto industry. So far in 2024, Bitcoin has surged over 60%, outpacing traditional assets like global stocks and gold.

Market watchers believe the recent rise of Bitcoin is connected to Trump’s favourable early results. Frederick Collins, chief executive of the crypto data platform VeloData, said last week that Bitcoin’s performance seems linked to Trump’s performance in the polls. “It’s relatively liquid and very tied to the outcome. So it’s pretty safe to assume any increases in price are tied to increases in Trump’s prospects of winning,” Collins said.

Crypto has become a central issue in this presidential campaign, in part because of the extraordinary amount of campaign money coming from the digital asset industry.

Trump has been courting crypto fans by promising that if he wins, he will make the U.S. the world leader in digital assets, create a Bitcoin reserve, and install regulators who are friendly to cryptocurrency. Harris, on the other hand, has taken a more measured approach. She supports what she describes as a regulatory balance between allowing the swiftly evolving industry to continue growing while protecting investors.

Investors Gird for Bitcoin Volatility as Votes Are Counted

As traders prepare for market volatility, the 30-day implied volatility index of Bitcoin-essentially, a measure of the expected price swings-has surged to levels not seen since July, when the president’s pullout from the race among them- spooked investors.

Traders expect very large moves around the US presidential election if data from CF Benchmarks is any guide-the options market is pricing in an 8% move on the day after the election versus normal day moves of around 2%, the firm said.

Investors presumably took a step back ahead of the US presidential election from Bitcoin exchange-traded funds. According to Bloomberg data, spot Bitcoin ETFs recorded an outflow of $579.5 million on Monday, which marks their largest one-day withdrawal, just as traders prepared for what could end up being a huge moment for the cryptocurrency landscape.