As the US election approaches, with the result expected to be announced late on November 5th or in the early hours of November 6th, today we will discuss the impact of the election on the trend of Bitcoin.
According to Coindesk, the price of Bitcoin has dropped below $68,000 ahead of the election. This trend may reflect market uncertainty over the election outcome. The consistent decline of Bitcoin over the past five days also shows that investors are being cautious, possibly waiting for a clearer election result before making investment decisions.
Market Prediction Probability Analysis
As a decentralized prediction platform, Polymarket’s winning probabilities are close to the odds offered by global betting exchanges and reflect the views of its global users. Meanwhile, the flow of funds in and out directly affects these probabilities, as investors do not bet money frivolously.
Recently, the prediction market Polymarket has shown that Trump’s winning probability has dropped from 66.9% to 55.9%, a significant decline of 16% in five days, a change mainly driven by the flow of funds, and the recent trend of Bitcoin has also shown a positive correlation with this.
Market analysis suggests that the rise in Harris’s winning probability and the decline in Trump’s winning probability may be related to speculative behavior. For example, if one invests $10,000 on a Harris win now, and she does win, the investor will receive a return of $12,600, doubling the investment in just a few days. Such high returns have attracted many investors, including Trump supporters, to buy Harris wins as a hedge.
As of now, Trump has a 55.9% chance of winning, while Harris has a 44.1% chance, a difference of 11.8%. Although this gap is quite significant, many investors still choose to hedge their bets due to the uncertainty of the election outcome. Such a strategy is considered conservative and wise in an uncertain market environment.
In addition, although Trump is currently trailing in the mail-in ballots, the ultimate result is still uncertain, given that many Republican voters tend to vote in person on the Election Day.
Over the past four to five days, as Trump’s winning probability has declined, the Bitcoin market has also experienced a slight pullback. This synchronicity may indicate that market participants are assessing the impact of political uncertainty on the cryptocurrency market and are taking election dynamics into account when making investment decisions.
Swing State Polls
Let’s take a closer look at the current swing state polls. At present, out of the seven key swing states, Trump and Harris each lead in four, with a very narrow margin of less than 1% in either direction. This razor-thin gap suggests that the race is extremely tight, and any slight change could alter the final election result.
Despite the narrow lead, Trump has outperformed expectations in the swing states. Historically, Democrats tend to perform strongly in these states, but at present, Trump is leading in most of the swing states. This is particularly important because the majority of Republican supporters tend to vote in person on the Election Day. Therefore, as we approach November 5th, Trump’s chance of winning is expected to increase further.
Over the next two days, the election suspense will intensify further, and the voting results of each state may become decisive. We look forward to the announcement of the election results, which will provide us with a clear answer as to who will lead the country for the next four years.
What Investors Are Watching
However, many people do not really care who will be the next US president; they care more about their investment returns and financial well-being. Here, I would like to share my views on the upcoming trend and outlook of the cryptocurrency market.
First, in my opinion, the long-term trend for cryptocurrencies should continue to be positive over the next four years, regardless of the election outcome, and there should not be much change in the overall trend.
Second, it is normal for the market to pull back amid the uncertainty leading up to the election. However, once the election result is known, I believe Bitcoin will rally to a new all-time high above $74,000 in the short term, regardless of whether Harris or Trump wins.
Meanwhile, if Harris wins, Bitcoin could see less volatility, with a steady rise during the bull market leading up to 2025, less overall volatility, and potentially less downside.
On the other hand, if Trump wins, Bitcoin could be highly volatile, potentially rallying quickly to $80,000, $90,000, or even $100,000 in a short period of time, but then experience a 30% pullback to $70,000 before continuing its rally.
Therefore, the view is that a Trump win could result in a much larger percentage move in the Bitcoin market than a Harris win.
For us long-term investors, as long as we avoid high-risk operations such as highly leveraged contracts, the impact of high or low market volatility on us is ultimately limited.
Finally, let’s not let market fluctuations sway our emotions and lead us to make poor investment decisions. In short, whoever becomes president or how the market fluctuates should not be our focus as long-term investors.
Conclusion:
As the US election draws near, global attention has been focused on the far-reaching implications of this political event on the financial markets. From prediction markets to swing state polls, every data point has been tugging at the heartstrings of investors.
As an emerging asset class, Bitcoin’s price fluctuations exhibit a subtle correlation with the dynamics of the election market. The consensus view is that regardless of whether Trump or Harris wins, market expectations will drive the price of Bitcoin to new highs in the short term.
However, for long-term investors, avoiding high-risk operations and making cool-headed investment decisions are the best ways to navigate market fluctuations. In short, while the election results are important, maintaining investment discipline and a long-term perspective is more critical.
