What investors thought to be the best months for Bitcoin have not gone without market casualties. Bitcoin’s price fell today as the market’s attention turned to the drop in Donald Trump’s odds in the upcoming United States presidential elections.
Different segments of the crypto industry have crossed over into this election cycle. Both Democratic nominee Kamala Harris and Republican nominee Donald Trump have tried to win over crypto voters.
Now, Bitcoin’s fate is at the mercy of the November election results. By design, it shouldn’t. However, institutional entities have made their way into crypto and brought about a segment of centralization. Analysts predict that the November election outcomes could push Bitcoin over $100,000 or drop it to under $40,000.
The odds of Kamala Harris winning next week’s U.S. presidential election continue to rise on the betting platform Polymarket. Some observers suggest the increase reflects hedging positions among traders who’ve also bet on a Donald Trump victory.
Some market watchers have attributed Friday’s crypto market slump to Trump’s slide on Polymarket. Investors may also interpret the drop as a sign that Kamala’s win is not good for crypto and Trump’s loss is Bitcoin’s loss.
Market observers say that the surge in the price for Harris’ shares reflects traders buying them as a hedge on their Trump bets. However, some allege reports of voting irregularities pitted against Trump that could influence market bets.
Trump and his supporters have already started to allege election fraud and voting irregularities in key states. However, local election officials have pushed back these claims.
Bitcoin heads for a bloody November
Bitcoin markets could go one of two ways: good or really bad. According to BTC trader, Eric Crown on X, there is “Something weird about Nov 2/3 during election years for BTC November lows.”
Crypto markets have had a bloody Halloween in the last 48 hours. The broader crypto market endured a strong sell-off on Thursday. According to on-chain data from CoinGecko, Bitcoin is currently worth $69,490, a 3.9% decline in the last 24 hours. However, its value today remains 2.8% higher compared to its value seven days ago.
A similar market correction is visible in the altcoins space, with Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) correcting by 5-7% each.
Crypto analyst Benjamin Cowen asserts that it is too early to celebrate BTC’s current move above $72,000. He added that monetary policy will weigh in once again. He said, “Labor market data is tomorrow. It should be the deciding factor for the cyclical view vs. monetary policy view of BTC for the rest of Q4. I think it should be apparent by the weekly close, which is the most likely outcome.”
Bitcoin has been widely considered a “Trump hedge” due to his strong support for the crypto industry. Earlier in the week, when Trump held a higher lead against Kamala, Bitcoin approached March’s all-time high of $73,790, coming within just $198 of the peak.
Key November economic events to watch
US equity markets are set to finish lower this week as mega-cap tech earnings came in mixed. Microsoft and Meta saw some unwinding post-earnings. Out of the 67% of S&P 500 companies that have released their earnings, 77% have beaten earnings expectations.
4th to 8th November 2024—China’s National People’s Congress (NPC) meeting: Weak economic conditions in China have forced Chinese authorities into rescue mode to meet their 5% GDP 2024 growth target. While monetary measures may support liquidity, markets are also hoping for more fiscal policies to stabilize some sectors, with more clarity to be sought from the NPC meeting.
In addition, Consumer prices are predicted to climb slightly to 0.6% in October from 0.4% in September, with underperformance in the last two months upping the chance of a downward surprise. This could put pressure on Chinese authorities to do more to reach its 5% GDP growth target at the upcoming NPC conference.
November 5th, 2024—Reserve Bank of Australia’s (RBA) interest rate decision: For its seventh consecutive meeting in September, the RBA held the official cash rate at 4.35%. While the Q3 drop in mean inflation lowered mean inflation to 3.5% from 4%, the sustained resilience of a labor market that has added 267k jobs in the last six months suggests that RBA’s lower interest rates will be a story in early 2025.
Experts predict the RBA will keep interest rates at 4.35% until the first rate drop in February 2025.
Friday, November 8th, 2024 – US FOMC meeting – The FOMC lowered interest rates by 50 basis points during its most recent meeting in September, bringing them down to 4.75%-5%. This was the Federal Reserve’s first rate drop in more than four years and was intended to help the US labor market.
The FOMC expects another 50bps of cuts this year and another 100bps next year, stabilizing at a long-term rate of 2.875%, which has increased by 12.5bps.
Most expect another 25 basis-point rate cut at the November FOMC meeting, followed by another 25-point cut in December.
Depending on how these events turn out, Bitcoin could fall to low points from earlier in the year.
