Bitcoin Market Anticipates Volatility Ahead of US Presidential Election
As the United States presidential election approaches on November 5, 2024, the Bitcoin market is expected to experience notable volatility. Bitcoin reached a peak of $73,620, driven by investor optimism regarding a potential Donald Trump victory. However, by Friday, the price corrected to $68,830 amid cautious sentiment as the election nears.
How To Trade Bitcoin During US Election
Alex Krüger, an economist and crypto analyst, provided a trading framework for Bitcoin during the election period on his X account. He outlined scenarios based on election outcomes: a Trump win could push Bitcoin to $90,000 by year-end with a 55% probability, while a Kamala Harris victory might see it settle around $65,000 with a 45% probability. Krüger noted that timing is crucial, stating, “Expect the move to be fast if Trump wins.”
Krüger observed that the current Bitcoin price, anticipated to range between $65k-68k before election night, had “overshot” based on probabilities favoring a Trump victory. He highlighted uncertainty due to the Pennsylvania vote count, which could delay the announcement of a winner.
“It largely depends on the Pennsylvania count, if it is lopsided or not. It could be as early as Tuesday evening EST, or days later if the count is very tight,” Krüger stated.
Krüger maintains a bullish outlook on equities regardless of the election outcome unless there is a significant Democratic win. He explained that “equities drag Bitcoin around.”
In his investment strategy, Krüger holds long positions in Bitcoin and Nvidia, planning to invest in Solana (SOL) if Trump wins, anticipating approval of a Solana Exchange Traded Fund (ETF) in the U.S.
Krüger's analysis indicates that the market has partially priced in a Trump victory, expecting his administration to enhance Bitcoin's price through regulatory clarity and pro-crypto policies. He also anticipates that Trump's focus on increased government spending would stimulate short-term economic growth, positively affecting equities linked to Bitcoin's performance.
A Harris victory would likely continue existing policies unless there is a significant Democratic sweep. Krüger concluded that betting markets place Trump's probabilities between 50% and 63%, suggesting a GOP victory is not fully priced in, leading him to expect no significant sell-off upon news. At press time, BTC traded at $70,402.
