A Historic First: Crypto Shapes U.S. Elections

With U.S. elections just a few hours away, not only has the official countdown started, but the cryptocurrency market is headed towards one of its most crucial weeks in 2024. 

For the very first time in the U.S. history, cryptocurrency has become both a major player and issue in a presidential election. According to findings by Public Citizen – a U.S. consumer group – the industry has contributed $119m this year trying to influence the federal elections. This represents about nearly half of all corporate contributions made so far in 2024.

As we approach the highly awaited 2024 U.S. elections, there has been a notable shift in interest and perceptions surrounding crypto ownership, with voters increasingly considering cryptocurrency’s role within the political landscape, according to Grayscale.

•    1 in 4 likely voters still see inflation as the single most pressing problem in America at the moment.
 

•    Almost half of likely voters agree that crypto/blockchain and automated technologies are the future of finance.
 

•    More voters are interested in investing in crypto assets following spot Bitcoin ETF’s approval. 

“First they laugh, then they copy”?

America has a choice to make — and crypto forms but one part of the bigger picture.

Not only has sentiment changed among voters, but presidential candidates have been also showing a newfound interest.

The question remains, though: is it genuine interest, or more of a strategic play to win over voters?

Donald Trump has done a complete U-turn on cryptocurrency. From calling crypto a scam back in 2021 and declaring that Bitcoin is “not money” and “based on thin air”, he started to publicly change his position.

1.    In May, he spoke at the Libertarian Party’s national convention, pledging to end President Biden’s “crusade to crush crypto.”

2.    He became the first major-party presidential candidate to accept cryptocurrency donations.

3.    By the end of July, Trump’s personal crypto portfolio was valued at nearly $8 million.

4.    JD Vance, Trump’s VP candidate, is also seen as pro-crypto. 

5.    In June, Vance began drafting a bill to reform cryptocurrency regulation by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

6.    Vance is the first vice-presidential candidate who owns Bitcoin, with holdings of up to $250,000 as of the end of 2022, according to his latest congressional financial disclosure.
 

What’s a competition without endless promises?

At the annual Bitcoin conference, Trump publicly criticised the U.S.’s strict crypto regulations, and promised to remove SEC chair Gary Gensler – who is not exactly loved by crypto adopters. Gensler had pushed to regulate digital assets, and had targeted major crypto players and exchanges.

Voters have been looking for signs that Harris will adopt a new stance on digital assets, moving away from her predecessor’s views. While there has been some progress, her support for crypto is not as strong as Trump’s.

Source: CryptoNews

Big Week for the Markets

Going into Election Day, financial markets prepare for high uncertainty, and historically, returns recorded before and after Election Day have shown high differences. Options trades across equities, bonds, currencies, and most importantly crypto are preparing for potential turbulence.

•    Over the weekend, Bitcoin dropped from $71,000 to trade at $68,763 at time of writing.
 

•    Ethereum also traded at $2,463 after a slight dip. 
 

The declining prices resulted in massive liquidations in the derivatives market. Coinglass data showed that in the past 24 hours, over $238 million was liquidated from the market.

The upcoming Federal Open Market Committee (FOMC) scheduled on November 7th is also set to have a big impact on markets. 50 basis points were slashed during the previous meeting, which has set stage for recovery in risk assets such as crypto.

The November meeting might make room for an additional 25bps rate cut, as per data from CME FedWatch Tool.

If the Fed cuts rates as per market expectations, crypto prices are poised for a potential uptrend. Why, you may ask? Loose monetary policy increases investors’ risk appetite, which in turns boosts demand for assets such as cryptocurrencies. 

Interesting Data

•    The amount of U.S. respondents who indicated to have zero crypto exposure dropped from 75% in 2022 to 65% in 2024.
 

•    Number of crypto holders slightly increased from 20% in 2022 to 21% in 2024.
 

•    Past owners surged from 5% in 2022 to 14% in 2024. 

Source: Cointelegraph

Markets Today

The cryptocurrency market showed mixed trends on Monday as investors prepared for key events—the US presidential election and an anticipated Federal Reserve rate cut, both of which could significantly impact crypto markets.

Major tokens like Bitcoin, Ethereum, Dogecoin, Tron, and Toncoin saw gains, while others such as BNB, Cardano, Shiba Inu, Chainlink, Polkadot, Litecoin, Uniswap, and NEAR Protocol experienced losses of up to 3%.

•    The volume of all stablecoins is now $65.12 billion, which constitues 93.44% of the total crypto market 24-hour volume, as per data available on CoinMarketCap.

•    In the last 24 hours, the market cap of Bitcoin, the world's largest cryptocurrency, increased to $1.363 trillion.

•    Bitcoin's dominance is currently 60.63%, according to CoinMarketCap.

•    BTC volume in the last 24 hours surged 42.64% to $33.44 billion.

Technical Analysis

Earlier this week, Bitcoin's pullback from its ATH may have prompted short-term traders to secure profits. Although the price has retreated to around $68,000, analysts remain optimistic, anticipating that Bitcoin will find solid support within the $65,000 to $68,000 range.

A break above $70,000 could potentially boost investor sentiment and spark renewed interest in select altcoins.

After reaching an all-time high of $73,777, Bitcoin traded in a ‘Descending Channel’ pattern before breaking out and climbing to $73,620. However, bulls were unable to surpass the previous all-time high, leading to some profit-taking.

Bitcoin has struggled to maintain a weekly close above the $70,000 mark in the past, and it has failed to do so again this time. A sustained weekly close above $70,000 could pave the way for further gains.

 

The next hours will be crucial to both the crypto market and the political landscape as the U.S. elections draw near. As traders and voters alike monitor key developments, any significant news or shifts in polling data could create volatility in the markets.

For cryptocurrencies, especially Bitcoin, the election outcomes could influence investor sentiment and regulatory approaches. A simple announcement from candidates regarding their stance on digital assets could easily sway public opinion and impact trading strategies.

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