The cryptocurrency Bitcoin has risen, indicating that some investors believe that the markets expect Republican candidate Donald Trump, who supports cryptocurrencies, to win the US presidential elections, according to Bloomberg.
Digital assets have risen by about 13% in the past seven days, well ahead of the global stock index and gold, and billionaire Stan Druckenmiller cited cryptocurrencies as one indicator that markets expect a Trump victory.
Cryptocurrency capital
Trump has vowed to make the United States the cryptocurrency capital of the world as he competes for votes in a close race against his Democratic rival, Vice President Kamala Harris.
His embrace of the sector led to Bitcoin being labeled a “Trump trade,” one of a series of bets dependent on his return to the White House.
Bitcoin’s advance has come alongside shifts in betting markets and contentious platforms with contentious information value as people bet on election results. Trump’s odds of winning on PollyMarket rose to 60%, while Harris’ odds fell to 40%.
Fund flows
“Excitement in prediction markets is leading to high levels of implied volatility and higher Bitcoin spot prices,” Bloomberg quoted Arisa Toyosaki, co-founder of Sega, a company that provides cryptocurrency derivatives services, as saying. “Recent large inflows into Bitcoin exchange-traded funds are also driving… Feed height.
Net flows into a group of 12 exchange-traded funds in the United States have exceeded $1.6 billion since October 11, and Bitcoin rose 0.13% in the last 24 hours to $67,340, at the time of writing this report.
Harris position
Harris pledged to support a regulatory framework for digital assets as well as the growth of the industry with appropriate safeguards, and her stance sparked a bout of optimism among cryptocurrency traders as it contrasts with the crackdown on crypto assets under the Biden administration.
The emergence of cryptocurrencies as an election issue is increasing interest in bitcoin and the broader crypto asset class, and this is translating into inflows, said Meltem Demirors, general partner at Creasable Capital.
Trump’s embrace of the sector is a radical shift, as he previously described it as a scam during his presidency, and digital asset companies have become influential players in elections through large donations to political action committees in pursuit of friendlier rules.
It should be noted that the administration of current President Joe Biden calls for strict regulation of the digital currency market, with guidance from federal agencies to ensure that the markets are safe and transparent.
The US government is seeking to establish strict rules to regulate digital currencies, as many officials believe that Bitcoin and other cryptocurrencies may pose a threat to financial stability if they are not properly regulated. For example, Treasury Secretary Janet Yellen previously cited concerns about the use of digital currencies for money laundering and terrorist financing.
However, some US regulators, such as the Securities and Exchange Commission, are stressing the need to classify some cryptocurrencies as securities, opening the door to more stringent oversight.
