Author: Omkar Godbole, CoinDesk; Translated by: Wuzhu, Golden Finance
Comparing the three-day changes in BTC prices and Republican election odds from June 1 to August 15 shows a lack of clear correlation between the two variables.
FalconX says a lot could change in the coming weeks.
While popular narrative suggests there is a strong positive correlation between Bitcoin’s (BTC) recent price performance and Republican candidate Donald Trump’s chances of winning the U.S. presidential election, market data suggests otherwise.
Crypto market experts have been linking the performance of Republican candidates on the betting markets to the price of Bitcoin since Trump met with Bitcoin miners in mid-June. This narrative was strengthened after Trump escaped assassination in July and after BTC came under pressure earlier this month due to the recovery of Democratic candidate Kamala Harris on the betting markets.
However, an analysis by prime broker FalconX of the three-day change in BTC prices and the three-day change in Polymarket odds of Trump winning the presidential election between June 1 and August 15 showed a lack of a clear trend or noticeable correlation between the two variables.
Chart showing lack of clear relationship between changes in Republican odds and changes in BTC price. (FalconX)
The X-axis shows the three-day percentage change in BTC price between June 1 and August 15. The Y-axis shows the increase or decrease in the probability of a Republican victory. The data is sampled every 12 hours.
The red dots represent the period between June 29 and July 29 when the probability of Trump winning the White House spiked on Polymarket. The blue dots represent the so-called Democratic momentum period. The gray dots represent the rest of the period between June 1 and August 15.
The red dots show a scattered pattern, meaning there is no connection between changes in the Republican odds and changes in BTC prices. The blue and gray dots show a similar pattern.
“Interestingly, there is no discernible relationship between election odds and BTC price over the entire analysis period of June 1 to August 15, 2024. One reason these relationships are weaker than expected could be the many crosscurrents influencing prices, such as the direction of U.S. monetary policy, concerns about an impending supply glut, and other factors we have highlighted previously,” David Lawant, head of research at FalconX, said in an email.
As reported, several headwinds have limited BTC’s upside since June, such as aggressive selling in the German state of Saxony and concerns about flooding supply for creditors of defunct exchange Mt. Gox, overshadowing changes in the Republican odds of a win.
However, with Harris now venturing into cryptocurrencies, the upcoming election could become a major driver of BTC prices.
"Of course, a lot can change before November 5. It will be interesting to see if forecasts change as we get closer to Election Day. Market data shows that election news is a key driver, even the dominant force, of price action," Lawant noted.
