According to CoinDesk: Contrary to popular belief, the correlation between Donald Trump's election odds and Bitcoin's price performance appears weaker than expected. Despite the narrative linking Trump's political fortunes to Bitcoin's market behaviour, recent data suggests that other factors might be playing a more significant role.
Weak Correlation Between Election Odds and BTC Price
A detailed analysis by FalconX reveals a lack of a definitive correlation between Trump's election odds and Bitcoin's price changes. This analysis, covering the period from June 1 to August 15, examined three-day percentage changes in Bitcoin's price against the odds of a Republican victory in the upcoming U.S. presidential election. The results show no consistent trend, with data points scattered across the chart, indicating that Trump's election odds do not have a significant impact on Bitcoin's price.
Influencing Factors Beyond Politics
David Lawant, head of research at FalconX, highlights that various crosscurrents are likely influencing Bitcoin's price, overshadowing any potential link to Trump's election odds. Key factors include U.S. monetary policy expectations, concerns over supply overhangs from entities like Mt. Gox's creditors, and aggressive selling by the German state of Saxony. These elements may be playing a more substantial role in driving Bitcoin's market behaviour than the political developments surrounding Trump.
Market Dynamics and Future Implications
As the U.S. presidential election approaches, the influence of political events on Bitcoin's price may evolve. While the current data does not support a strong connection between Trump's election odds and Bitcoin's price, the situation could change as election day draws nearer. Lawant suggests that prediction market data might eventually reveal election news as a more significant driver of Bitcoin's price action.
In conclusion, while Trump's election odds have been widely discussed concerning Bitcoin's market performance, the data indicates that other factors are more influential. The interplay of various market forces will likely continue to shape Bitcoin's price, with political developments remaining one of many potential influences.