“Most people resist the truth when it doesn’t match their wishes.
——Redd Leo, founder of Bridgewater Associates (Principles)”
With less than three weeks to go before the US election, Polymarket's odds for Trump's victory have risen sharply, leading Harris by 20%. This lead is mainly due to his decisive advantage in the key swing states with the most electoral votes.
Due to rising inflation expectations and concerns about increased US fiscal spending, the market predicts that the US 10-year Treasury bond rate may rise to 5% this year. The Federal Reserve's recent interest rate cuts and strong economic data have raised questions about the sustainability of interest rate cuts, increasing market attention to the direction of bonds. The expansion of government deficits and the Federal Reserve's tightening policy have weakened the demand for Treasury bonds and pushed up inflation expectations, resulting in a possible steeper long-term Treasury bond interest rate curve.
Against this backdrop, the interest burden on U.S. debt has reached its highest level since the 1990s, and fiscal conditions are under pressure. At the same time, the price of Bitcoin also slightly retreated from $69,000 to the $67,000 range.
Regardless, the cryptocurrency market has accepted that a Republican victory is increasingly likely. After Bitcoin broke through the $68,000 resistance level, it was rejected when it hit $70,000.
However, since bottoming on August 5, the lows have been higher and the highs have been higher.
Bitcoin’s market cap dominance has climbed to a post-FTX high of approximately 58.4%, with ETH continuing its downward trend relative to Bitcoin during this cycle.
Bitcoin dominance has been a leading indicator of altcoin seasons, with altcoin markets peaking within 1-5 months. If history repeats itself, we may be approaching an altcoin season, and the dust settling on the US election in November, coupled with the Fed’s November rate decision immediately after Election Day, could be a catalyst for a further rally as market uncertainty is removed.
When the Bitcoin price reaches $70,300, it will trigger the liquidation of more than $15 billion in shorts.
According to the (State of Cryptocurrency in 2024) report released by A16z last week, we are on track to achieve mainstream adoption at a similar pace to the internet, with user growth accelerating since 2023 and monthly active addresses now at an all-time high.
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.