The attention on Bitcoin's upward trend is partly due to some investors believing that this surge indicates the market expects pro-cryptocurrency Republican candidate Donald Trump to win the U.S. presidential election.

Bitcoin has risen about 13% in the past 7 days, significantly outperforming global stock indices and gold. Billionaire Stan Druckenmiller has identified cryptocurrency as one of the indicators for the market digesting a Trump victory.

Trump previously vowed to make America the global capital of cryptocurrency, and his endorsement of the industry has led Bitcoin to be categorized as the so-called Trump trade, becoming one of the series of bets surrounding his return to the White House.

The rise in Bitcoin comes with a shift in market expectations. On the Polymarket platform, the expected probability of Trump winning has risen to 58%, while Harris has dropped to 41%. On the PredictIt platform, the probability of Trump winning is 54%, and Harris is at 49%.

ETF inflows

"The excitement in the prediction markets is leading to high implied volatility and an increase in spot Bitcoin prices," said Arisa Toyosaki, co-founder of cryptocurrency derivatives service provider Cega. "A recent influx of funds into Bitcoin exchange-traded funds (ETFs) has also fueled the upward trend."

Singapore time Thursday 14:06, Bitcoin slightly fell to around $67,251, with the record high of $73,798 set in March.

Prediction markets have moved in a direction favorable to Trump, but with less than three weeks until election day, the margins in most polls are within the margin of error. In the average of national polls from Real Clear Politics, Harris leads Trump by about 1.6 percentage points. On the same metrics, Trump’s lead in battleground states is less than 1 percentage point.

Harris's stance

Harris has taken a subtle stance on cryptocurrencies, promising to support a regulatory framework for digital assets and industry growth under appropriate safeguards. Her position has sparked optimism among cryptocurrency traders, contrasting sharply with the Biden administration's crackdown stance.

Meltem Demirors, a general partner at Crucible Capital, stated, "The emergence of cryptocurrency as an electoral issue is generating significant attention toward Bitcoin and the broader category of crypto assets, and this attention is translating into sentiment, which, as we know, drives capital flows."