NAIROBI (CoinChapter.com) — Crypto Market investors are on high alert as the U.S. election between Kamala Harris and Donald Trump enters its final stretch. Analysts have noted a connection between Trump’s polling strength and Bitcoin’s price. This suggests that a Trump win could boost Bitcoin, while a Harris victory might bring tighter regulatory scrutiny.
Crypto analyst Miles Deutscher pointed to this correlation, highlighting traders’ sensitivity to potential shifts in crypto policy.
Trump’s lead narrows as BTC price dips. Source: Miles Deutscher/X
Betting markets now narrowly favor a Trump win, but odds for a full Republican sweep dropped to 36% from 48% last week. In contrast, the odds of a Harris win with a split Congress stand at 27%. This leaves traders to weigh the impact of a potentially divided government on digital asset policy.
Market Volatility Rises as Investors Brace for Election Impact
In anticipation of the U.S. election, traders have heightened hedging activity across markets, especially in equity options. S&P 500 options volatility surged throughout October, signaling expectations for price swings as the election, earnings season, and Federal Reserve decisions loom.
Currency markets are also feeling the heat; one-week dollar-yuan volatility recently hit a record high, highlighting concerns over the election’s global ripple effect.
The S&P 500 Index is showing a steady uptrend in 2024. Source: TradingView
U.S. stocks began November with mixed results. Although Amazon and Intel posted positive earnings, the Nasdaq 100 dropped 1.57% for the week, the S&P 500 slipped 1.37%, and the Dow fell 62 points.
Meanwhile, the latest U.S. jobs report showed just 12,000 new jobs in October—far below the 113,000 expected—partly due to hurricane disruptions and strikes. The report raised concerns about economic stability ahead of the U.S. election.
Fed Rate Decision Adds to Uncertainty in Crypto Markets
Following the U.S. election, the Federal Open Market Committee (FOMC) will meet to discuss another potential rate cut. While a 25 basis-point cut is expected, recent economic strength has reduced calls for more aggressive easing.
The Fed’s September 50 basis-point cut aimed to support the labor market, but inflation has since remained subdued, and the economy has outperformed expectations.
U.S. Federal Funds Rate trend since 2006. Credit: Federal Reserve Bank of St. Louis
Vote counting starts early Wednesday (Sydney time), with major networks like AP and Fox News offering state-by-state projections. A close race could delay results, similar to 2020, when it took four days to declare a winner. Any extended count may prolong uncertainty. There is the potential for crypto market swings as traders seek clarity.
As election day draws near, crypto traders are on edge, anticipating price movements tied to both election results and upcoming Fed decisions. With regulatory direction at stake, crypto markets are primed for a turbulent week.
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