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 fell to 35.5%, a difference of nearly 30 percentage points. Who the next occupant of the White House will be will depend on the results from seven states, including Pennsylvania, Georgia, and North Carolina. Among them are 'non-swing' staunch supporters and true swing states that have fluctuated 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 rise, the market has begun to question whether the Federal Reserve will continue to cut interest rates significantly in the future. As investors consider the slowing pace of Fed rate cuts, bonds from Australia to Japan, as well as U.S. Treasuries, are all declining; this trend may disrupt bond positions globally.
The core reason for the global bond market crash is investors' reflections on the Fed's interest rate cut expectations and whether the current cut expectations are once again excessive. The strong U.S. economy, the rising probability of Trump winning the election, and cautious comments from Fed officials regarding the pace of loose monetary policy have blurred the profit outlook for bond traders worldwide. 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 for yields.
The U.S. election is full of variables until the dust settles. If Harris is elected, it is very likely that the policies of the Biden administration will continue. If Trump is elected, his domestic policies will focus on tax cuts, trade protectionism, bringing back manufacturing, energy independence, strengthening border controls, and ending wars! Internationally, he advocates for tariffs on imported goods, especially high tariffs targeting China.
As Musk serves as Trump's top aide, he is sparing no effort in this election. Besides using his influence to rally votes, he is also spending 1 million dollars daily to support Trump. This practice has caused dissatisfaction from the governor of Pennsylvania. The peak showdown between the Democratic and Republican parties has begun. Data shows Trump is favored to win, but the strength of the Democrats should not be underestimated. Who will win and where the flower will bloom remains to be seen!
In the cryptocurrency space, BlackRock's IBIT purchases remain strong, with a net inflow of 4,814 BTC yesterday. However, other ETFs have shown clear signs of fear of heights, with small amounts being bought or sold. As is well known, BlackRock represents professional investors from Wall Street, while investors in ETFs like Fidelity and AKRB are mainly retail investors. IBIT has maintained a positive buying rhythm since its approval day and has never changed! Even during significant BTC pullbacks, the selling volume has not been large. BlackRock aims to control the entire market and will not care about short-term market fluctuations, which is why they are willing to invest regardless of cost. Therefore, using BlackRock's buying and selling actions as a short-term reference is unscientific; they buy when prices rise and buy when they fall!
In the long term, if Trump wins the election, Bitcoin still has a fair chance to stabilize around the 70,000 mark, but not 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 maintaining interest rates in November, leading to a massive sell-off of Treasuries and a significant increase in Treasury yields. These are all signals of the market betting on the Fed keeping rates unchanged. Although Trump has stated that he will significantly reduce rates if elected, the President's influence on the Fed's decisions is quite limited! Therefore, BTC is expected to stabilize at 70,000 only after the election concludes and a favorable outcome is achieved, following the Fed's rate decision!
In the short term, BTC is unlikely to continue rising due to the market being full of uncertain factors, so bulls will theoretically become more cautious. The market is expected to oscillate at high levels or experience slight pullbacks. The recent trend aligns with the community’s views; in the article on the 20th, we suggested that the market would reach a recent high between 69,000 and 70,000 points, followed by a pullback. Looking back, the trend is basically consistent with the community’s expectations! Next, before the election results and the Federal Reserve's decision, the main trend will be basic oscillation or weak pullbacks; the probability of the market stabilizing above 70,000 is low, unless significant favorable news emerges! Short-term pressure for BTC is between 68,500 and 69,000, with support at 65,500 to 65,000. ETH continues to show weakness; Ethereum's ETF saw a net outflow of 7,571 ETH yesterday, with the price dropping to around 2,610. From both the fundamental perspective and market sentiment, Ethereum is in a relatively weak and awkward position, with investment returns significantly lower than SOL, BNB, and even BTC. Additionally, ETH's Layer 2 performance is not good, making ETH a poor investment choice in the short term!
In the altcoin space, the market focus remains on the SOL series and the AI MEME series. Whether on-chain or in the secondary market, if the market experiences a pullback, it is suggested to focus on hot tracks for investments. Less popular tracks may see individual altcoins suddenly surge due to favorable news, but these are unpredictable. Recently, APE launched a public chain that saw a significant price surge, but if APE's public chain cannot be continuously developed or the ecosystem does not grow explosively, this hot trend will eventually fade. APE's price trend has also shown signals of reaching a peak and offloading, so chasing highs carries risks!
