Original | Odaily Planet Daily (@OdailyChina)
Author | Nan Zhi (@Assassin_Malvo)
This morning, Trump's vote count in the presidential election continues to rise, and as of 11:17 (UTC+8), the probability of Trump winning the U.S. presidential election on Polymarket exceeds 90%, leading to a surge in Bitcoin and the crypto market.
At 11 o'clock, Bitcoin quickly broke through its historical high, setting a new record of 75,000 USDT, with a 24-hour increase of nearly 10% (thus far, BTC has not disappointed any Hodler).
Meanwhile, Ethereum has broken through 2600 USDT, with a 24H increase of 6.8%; SOL has broken through 180 USDT, with a 24H increase of 13.8%.
The total market capitalization of cryptocurrencies has surged significantly. According to CoinGecko, the current total crypto market cap has risen to 2.6 trillion USD, with a 24H increase of 6.72%.
In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the entire network has seen liquidations of $452 million, with the majority being short liquidations totaling $346 million. By cryptocurrency, BTC saw liquidations of $244 million, DOGE $39.7 million, and ETH $37.66 million.
Just a new high
Why is there such a close relationship between Trump's probability of winning the U.S. election and the crypto market's movements? The core reason lies in Trump's and his team's promise to adopt a more lenient attitude towards cryptocurrencies compared to the Democrats, such as not allowing the creation of a CBDC (digital dollar) to avoid restricting Americans' financial freedom; establishing a strategic reserve for Bitcoin, with the U.S. government under his leadership no longer selling Bitcoin and holding it long-term; he also pointed out that the U.S. will establish a special task force responsible for cryptocurrency policy—the Bitcoin and Crypto Presidential Advisory Committee.
On the other hand, Trump will also have a significant impact and change on the U.S. macroeconomic trends. According to Jinshi, the next U.S. president will fill multiple vacant positions, and Powell's term as chairman of the Federal Reserve will end in May 2026, allowing Trump or Harris to choose the next leader of the Federal Reserve.
Mark Spindel, chief investment officer of Potomac River Capital and historian researching the Federal Reserve and politics, noted in a recent interview that this is "a critical crossroads for the Federal Reserve." He added that if Trump's team wins, they will clearly be "very proactive." During his presidency, Trump frequently attacked Powell and publicly pushed the central bank to act according to his ideas, even suggesting negative interest rates, and Trump has hinted that if he wins a second term, he might do even more.
Options data: The $80,000 threshold becomes a key price level, with sold calls dominating.
Options data shows that traders are focusing their bets around the $80,000 Bitcoin strike price, with strong sales of short-term call options as traders prepare for potential price movements using option premiums.
Forster stated: "The dominance of sold call options indicates that traders are strategically collecting premiums, while the focus on the $80,000 target highlights a potential turning point for Bitcoin."
Public sentiment is euphoric, with the panic index hovering at a high level.
Alternative data shows that today's Fear and Greed Index rose to 70, remaining in the Greed category, while last week's level was Extreme Greed.
Odaily Planet Daily note: The panic index threshold is 0-100, including indicators: Volatility (25%) + Market Trading Volume (25%) + Social Media Heat (15%) + Market Survey (15%) + Bitcoin's Percentage in the Overall Market (10%) + Google Trends Analysis (10%).
What to watch after the election?
After the election, the most critical event this week will be the announcement of the Federal Reserve's interest rate decision, while Fed Chairman Powell will hold a monetary policy press conference.
In terms of timing, affected by the U.S. election and daylight saving time, the Federal Reserve will announce its interest rate decision at 03:00 Beijing time on November 8 (Friday).
As usual, the Federal Reserve holds its policy meetings on Tuesday and Wednesday, with the decision results announced on Thursday morning Beijing time, but this time it coincides with the U.S. election voting, so the Fed's meeting has been postponed by one day. The U.S. election voting will begin at 13:00 Beijing time on November 5, 2024 (Tuesday).
How much will the interest rate be cut?
Goldman Sachs chief economist Jan Hatzius stated that the Federal Reserve will fulfill its earlier hint of two interest rate cuts by the end of the year, particularly following last week's release of a weaker-than-expected employment report. He expects this situation to persist into the first half of 2025.
In a report released last Sunday, Hatzius stated, "We expect the Federal Reserve to cut rates four times in the first half of 2025, ultimately bringing the rate down to 3.25%-3.5%, but we have greater uncertainty regarding the pace of Fed rate cuts and the ultimate target for next year," he added that his forecast is about 50 basis points above market consensus.
According to Jinshi, investors are anticipating that Fed Chairman Powell will lower interest rates by 25 basis points this week to keep the rate cut plan on track, despite some stubborn inflation signs and mixed signals about the job market. JPMorgan chief economist Michael Feroli stated in a report: "This week's FOMC meeting is a refreshingly straightforward decision, and the reasons for a rate cut remain valid." Fed watchers expect Powell to reach a consensus around a modest rate cut following a significant cut in September.
