By Bitcoin’s price is surging again, with investors watching closely as it approaches the all-time highs of March. Over the past week, the price of bitcoin jumped 11%, pushing it past $67,800.
This rally has sparked significant interest among both traders and political observers, with many connecting the rise in cryptocurrency to the upcoming US presidential election, where pro-crypto candidate Donald Trump faces off against Vice President Kamala Harris.
The crypto world is buzzing with speculation, particularly as Trump’s stance on digital assets appears to be influencing market sentiment.
Is Bitcoin a “Trump trade”?
As the race between Trump and Harris tightens, cryptocurrency is emerging as a key election issue.
Trump, who has openly expressed his support for making the US a leader in the crypto space, is seen by many as a bullish factor for bitcoin.
Investors are increasingly referring to bitcoin’s recent surge as part of a “Trump trade,” where the market is speculating on the potential impact of his return to the White House.
His promises to reduce regulatory hurdles for digital assets have aligned with the growing confidence among bitcoin holders, many of whom see this as an opportunity to push bitcoin to new highs.
Prediction markets, where investors bet on election outcomes, reflect this sentiment.
On platforms like Polymarket, Trump’s odds of winning have surged to 59.7%, with Harris trailing at 40%. Similarly, on PredictIt, Trump holds a slight lead with 54%.
Source: Polymarket
This optimism correlates with the rising price of bitcoin, suggesting a strong belief that a Trump victory could drive further gains for digital assets.
Harris’ balanced approach to crypto
Kamala Harris, however, offers a more balanced approach to cryptocurrency.
While she supports the growth of digital assets, she emphasises the need for regulations that ensure safety and protect consumers.
This position contrasts with the current administration’s more cautious stance, offering a middle ground that appeals to investors seeking a regulated yet innovative crypto market.
Although her platform is less aggressive in promoting crypto than Trump’s, Harris’ position provides a sense of cautious optimism to parts of the industry.
Despite this, the prediction markets still favour Trump.
The recent surge in bitcoin prices is being closely tied to speculation about Trump’s potential policies, particularly his promises to promote crypto-friendly regulations.
This has led some market analysts to suggest that the cryptocurrency market could experience further gains if Trump maintains his edge in the race.
ETF inflows and market momentum
The recent Bitcoin rally isn’t solely driven by the election. Significant inflows into bitcoin exchange-traded funds (ETFs) in the US have contributed to the momentum.
Since October 11, net inflows into bitcoin ETFs have exceeded $700 million, reflecting strong investor demand.
This influx of capital has helped stabilise Bitcoin’s price around $67,260, indicating a bullish trend that is likely to continue.
Arisa Toyosaki, co-founder of Cega, a crypto derivatives platform, highlights the role of prediction markets in contributing to bitcoin’s price volatility.
She noted that as investors bet on the outcome of the US presidential election, the excitement is spilling over into the broader crypto market, driving up prices.
Toyosaki’s analysis underscores the interconnectedness of political events and market sentiment, as traders look to capitalise on potential future shifts in regulation and policy.
Tight polls but shifting market sentiment
While prediction markets are bullish on Trump, national polls paint a different picture. Harris leads Trump by 1.6 percentage points, although the race remains extremely tight, particularly in key battleground states.
These close polls indicate that the outcome of the election is far from certain, yet the optimism in prediction markets is fuelling bitcoin’s recent rally.
Trump’s slight advantage in critical states like Florida and Pennsylvania is leading investors to believe that his return to power is a strong possibility.
With bitcoin continuing to rise, many are watching closely to see how the intersection of politics and cryptocurrency will play out in the final weeks leading up to the election.
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