Bitcoin: the price drops after the news about Donald Trump

Over the weekend, a couple of interesting news items about Bitcoin emerged, somehow related to Donald Trump. 

Although the outcome of tomorrow’s elections might not change the medium/long-term trend of BTC’s price, it seems instead to be able to have an impact on the short-term trend. 

The drop in BTC price yesterday

What happened yesterday is textbook. 

During the weekend, traditional stock exchanges are closed, and for this reason, no significant movements were expected even in the crypto markets.

Yet yesterday the price of Bitcoin first fell below $69,000, and then it also fell below $68,000. This hadn’t happened since last Monday.

To tell the truth, the decline had already started on Thursday, when it failed to hold the 71,000$, but on Friday and Saturday this decline seemed to have stopped. 

What could have happened on Sunday that triggered yesterday’s bear?

First of all, it must be said that nothing significant has happened within the crypto sector. These are external events. 

Furthermore, it is necessary to specify that the strong and rapid rise at the end of October had inevitably left behind some inefficiencies that were filled yesterday. 

News: The probabilities of Donald Trump’s victory decrease, Bitcoin also falls

The news that triggered yesterday’s drop in the price of Bitcoin concerns the probabilities of Donald Trump’s victory in tomorrow’s elections. 

It should be remembered that Trump can be considered in all respects as a crypto candidate, while his rival Kamala Harris is not. 

According to the data from Polymarket, until October 30, Trump was ahead by several percentage points among bettors. However, starting from the 31st, his chances of victory would have decreased.

In particular yesterday, due to a couple of polls that showed Harris winning in a couple of key states, Trump’s chances of victory decreased significantly, even though they remained higher than those of Harris. 

But besides Polymarket, which is a crypto betting platform, there are also other betting platforms, in fiat currency, where the gap is even smaller. 

For example, on Kalshi it has now become a head-to-head, after at the end of October the game seemed already closed.

Moreover, Polymarket is a bit biased, given that it is a crypto platform, while Kalshi is not. 

On Kalshi as of October 30, the probabilities of Trump’s victory were even given at 64%, with Harris almost considered a lost cause. And yet, not only had Trump’s victory probabilities dropped below 54% on Saturday, but today they are only at 51%. 

Note that generally surveys have a margin of error of about 2%, so at this moment the difference between the two seems to be within the margin of error. 

Crypto news: the relationship between Donald Trump and Bitcoin

In the medium/long term, it does not seem that the victory of Trump or Harris could have significant impacts on the price of Bitcoin. 

However, the discourse changes completely in the short term, given that Trump is an openly pro-crypto president, while Harris is not. 

It should still be remembered that what candidates promise during the election campaign is almost irrelevant, because electoral propaganda is fundamentally made up of lies. 

Yesterday, for example, Trump stated that Bitcoin is not a threat to the dollar, whose real threat instead would be the behavior of the current bull government of the United States.

Although Trump might not actually be a staunch supporter of the crypto sector, and might just be a skillful opportunistic exploiter, some of his statements are perfectly in line with the thinking of many bitcoiners. 

Here is how when its chances of winning decrease, the price of Bitcoin also tends to decrease in the short term. 

Bitcoin Price Forecast

After the strong and rapid rise even above $73,000 last week, it was evident that the price of BTC had left behind some inefficiencies. 

The best time to fill them was precisely the weekend, with the traditional markets closed. 

Given that, moreover, the probabilities of Trump’s victory over the weekend have decreased, the drop in the price of BTC was almost inevitable. 

However, the discourse has now changed completely. 

The inefficiencies, in fact, have been more or less all filled, and usually financial markets react well to the outcome of the U.S. elections, regardless of who the winner is. 

This time, however, there is a big problem. 

In fact, not only could it be difficult to have the definitive outcome by Wednesday, but it might take days to have it in case of high uncertainty. 

So if the outcome is more or less certain by Wednesday, traditional stock markets could start a mini-rally, perhaps even tomorrow, bringing along the crypto markets and therefore Bitcoin. 

In the event that there is significant uncertainty, such a rally could be postponed by a few days. 

What instead seems probable is that the rally will occur, unless the disputes are such as to jeopardize the outcome of the vote. In 2020, for example, there were disputes, but they were not able to jeopardize the outcome of the vote, so much so that the bull rally took place.

Furthermore, if the Dollar Index were to finally start to fall, Bitcoin could start to rise, and in that case, a true bullrun could also be triggered.