On October 22, the probability of Trump winning the U.S. presidential election on the prediction market Polymarket rose to 64.5%, while Harris's probability dropped to 35.5%, with a nearly 30 percentage point difference between the two. The identity of the next occupant of the White House will depend on the results from seven states, including Pennsylvania, Georgia, and North Carolina. Among them are steadfast supporters who are not 'swinging' and true swing states that have been 'unpredictable' in the past three elections.
Additionally, the prediction volume on the Polymarket platform regarding the U.S. presidential election has approached 2.2 billion dollars, with most funds betting on Trump's victory. As Trump's winning probability continues to increase, the market has raised certain doubts about whether the Federal Reserve will continue to significantly lower interest rates in the future. Due to investors considering the prospect of a slowdown in the Fed's rate cuts, bonds from Australia to Japan and U.S. Treasuries have been declining. This trend could disrupt bond positions globally.
The core reason for the global bond market's sharp decline is investors' reflection on the Fed's rate cut expectations and whether the current expectations are overly aggressive. The strong U.S. economy, the rising probability of Trump's election win, and cautious comments from Fed officials regarding the pace of loose monetary policy have made the yield prospects for bond traders unclear. The Fed may remain inactive in the next six months, while the market has not truly accounted for this, leading to a strong upward tendency in yields.
Until the U.S. elections are settled, everything is full of variables. If Harris is elected, it is highly probable that the policies of the Biden administration will continue. If Trump is elected, his domestic policies will focus on tax cuts, trade protection, manufacturing return, energy independence, strengthening border control, and ending wars! Internationally, he advocates imposing tariffs on imported goods, especially high tariffs on China.
As Musk acts as Trump's number one aide, he has been especially active in this election matter. In addition to using his influence to gather votes, he is also spending 1 million dollars daily to support Trump. This behavior has caused dissatisfaction among the governors of Pennsylvania. The peak showdown between the Democratic and Republican parties has already begun. Data shows that Trump is in a strong position, but the strength of the Democratic Party should not be underestimated. Who will win and where will the flowers fall? We will wait and see!
In the crypto space, BlackRock’s IBIT remains strong, with a net inflow of 4,814 BTC yesterday. However, other ETFs have shown clear fear of heights, with only minor buying or selling. As is well known, BlackRock represents professional investors from Wall Street, while investors in ETFs like Fidelity and AKRB are primarily retail investors. Since the day IBIT was approved, it has maintained an active buying rhythm without change! Even during significant BTC corrections, the selling volume has not been high. BlackRock aims to control the entire market and does not care about short-term fluctuations; hence, they are willing to disregard costs. Thus, using BlackRock's buying and selling as a reference for short-term fluctuations is unscientific; they will buy when it goes up and buy when it goes down!
In the long run, if Trump wins the election, Bitcoin still has a fair chance of stabilizing around 70,000 points, but not right now. As Trump's winning probability continues to rise, the market has become uncertain about whether the Fed will cut rates on November 6. The market has started to bet on the Fed keeping rates unchanged in November, with Treasuries being significantly sold off and yields increasing sharply. These are all signals of the market betting on the Fed maintaining interest rates. Although Trump has stated that he will significantly lower rates if elected, the influence of the U.S. president on the Fed's decisions is relatively limited! Therefore, for BTC to stabilize at 70,000, it is expected to wait until the election is over and a good result is obtained, after the Fed's interest rate decision!
In the short term, due to the uncertainty in the market, the probability of BTC continuing to rise is not high, and bulls will theoretically become more cautious. The market is expected to oscillate at high levels or show a slight correction. The recent trends align with the community's views. In our article on the 20th, we suggested that the market would show recent highs between 69,000 and 70,000 points and would experience a correction. Looking back, the trends were basically consistent with the community's expectations! Next, before the election ends and the Federal Reserve's decision, the market will mainly experience consolidation or weak corrections. The probability of the market stabilizing at 70,000 is low unless there is a significant positive news!! The short-term pressure for BTC is between 68,500-69,000, with support at 65,500 to 65,000. ETH remains weak, with Ethereum's ETF seeing a net outflow of 7,571 ETH yesterday, and the market fell to around 2,610. From both fundamental and market sentiment perspectives, Ethereum is in a relatively weak and awkward position, with returns significantly lower than SOL, BNB, and even BTC. Moreover, ETH's layer two performance is also unsatisfactory; in the short term, the ETH series is not a good investment choice!
In the altcoin space, market hotspots are still focused on the SOL series and the AI MEME series. Whether on-chain or in the secondary market, if the market shows a pullback, it is advisable to focus on laying out hot tracks. While obscure tracks may see individual altcoins suddenly gain, these are unpredictable. Recently, APE launched a public chain, and the market surged. However, if APE's public chain cannot be continuously built and the ecosystem does not experience explosive growth, this hot trend will eventually fade. The APE trend has also shown signals of topping and unloading, and chasing highs carries risks!
