As the U.S. election approaches, with results expected to be revealed late on November 5 or early on November 6, today we will discuss the impact of the election on Bitcoin's trends.
According to Coindesk, Bitcoin's price fell below $68,000 before the election. This trend may reflect the market's uncertainty regarding the election results. The persistent decline in Bitcoin over the past five days also shows a cautious attitude from investors, who may be waiting for clearer election outcomes before making investment decisions.
Market Probability Analysis
Polymarket, as a decentralized prediction platform, shows winning probabilities similar to those of global casinos, reflecting the views of global users. Additionally, the inflow and outflow of capital directly impact these probabilities, as investors will not lose money unnecessarily.
Recently, the prediction market Polymarket showed that Trump's probability of winning dropped from 66.9% to 55.9%, a significant decrease of 16% within five days, mainly influenced by capital flows, and Bitcoin's recent market trends have shown a positive correlation with this change.
Market analysis suggests the rise in Harris's probability of winning and the drop in Trump's winning probability may be related to speculative behavior. For example, if one now invests $10,000 betting on Harris's victory, if she indeed wins, the investor will receive $12,600 in return, effectively doubling their investment in just a few days. This high return rate has attracted many investors, including Trump's supporters, who have started buying bets on Harris's victory as a hedging strategy.
As of now, Trump's probability of winning is 55.9%, while Harris is at 44.1%, with a difference of 11.8%. Although this gap is quite significant, many investors still choose to adopt hedging strategies to reduce potential risks due to the uncertainty of the election results. This strategy is regarded as a conservative and wise choice in an uncertain market environment.
Additionally, despite Trump showing a temporary lead in the mail-in voting system, the final election outcome remains uncertain, as many Republican voters tend to prefer voting in person on election day.
In the past four to five days, as the probability of Trump's victory has decreased, the Bitcoin market has also experienced a slight correction. This synchronicity may indicate that market participants are assessing the impact of political uncertainty on the cryptocurrency market and viewing the election dynamics as a factor influencing their investment decisions.
Polls in Swing States
Let’s delve into the current polling situation in swing states. Currently, in seven key swing states, both Trump and Harris have leads, with Trump leading in four of the seven swing states and Harris leading in one, but both leads are very close, each below 1%. This slight difference indicates fierce competition, and any small change could alter the final election outcome.
Despite the narrow leads, Trump's performance in swing states has been surprisingly strong. Historically, the Democratic Party has usually performed well in these states, but currently, Trump is maintaining a lead in most swing states. This is particularly important as most Republican supporters prefer to vote in person on election day. Therefore, with the arrival of November 5, Trump's chances of winning are expected to increase further.
In the next two days, the tense atmosphere of the election will further intensify, and the voting results from each state could become decisive factors. We look forward to the announcement of the election results, which will provide us with a clear answer about who will lead this country for the next four years.
Focus of Investor Attention
However, many people do not actually care too much about who will become the next president of the United States; they care more about their investment returns and financial health. Here, I want to share my views on the future trends of the cryptocurrency market.
Firstly, in my view, regardless of the election result, the overall trend for cryptocurrencies in the next four years should continue to be positive, with no major trend changes expected.
Secondly, in the uncertainty leading up to the election, market corrections are normal. However, once the election results are out, regardless of whether Harris or Trump is elected, I believe Bitcoin will break through $74,000 in the short term and set new historical highs.
At the same time, if Harris is elected, Bitcoin's volatility may be smaller, expected to rise steadily during the bull market in 2025, with overall volatility being low and the downward adjustments likely not being significant.
If Trump is elected, Bitcoin's volatility could be very large, potentially rising rapidly to $80,000, $90,000, or even $100,000 in a short time, but then it might experience a 30% correction to $70,000 before continuing to rise.
Therefore, the view is that Trump's election could lead to a much greater percentage of Bitcoin market volatility compared to Harris's election.
For long-term investors, as long as they avoid high-risk operations such as high-leverage contracts, the market's high or low volatility ultimately has limited impact on us.
Finally, do not let market volatility sway our emotions, leading to erroneous investment decisions. In summary, regardless of who becomes president, or how the market fluctuates, these are not the focal points for us as long-term investors.
Conclusion:
As the U.S. election approaches, global attention is focused on the profound impact of this political event on financial markets. From prediction markets to polls in swing states, every data point touches the hearts of investors.
Bitcoin, as an emerging asset class, shows a subtle correlation between its price volatility and the dynamics of the election market. Many viewpoints suggest that regardless of whether Trump or Harris is elected, market expectations will drive Bitcoin prices to new highs in the short term.
However, for long-term investors, avoiding high-risk operations and maintaining calm investment decisions is the key to navigating market volatility. In conclusion, while the election results are indeed important, maintaining investment discipline and a long-term perspective is even more critical.
