The weekend attack on pro-crypto presidential candidate Donald Trump is expected to boost bids for cryptocurrencies, according to one observer.
Impact on Cryptocurrency Market
Assets tied to Trump’s chances of winning the November 4th elections are experiencing renewed volatility. This comes after an assassination attempt on the former president on Saturday. Bitcoin (BTC) has surged 7% to $62,500 since the attack, increasing Trump’s odds of winning to 70% on Polymarket.
Bitcoin’s Momentum
Bitcoin has surpassed the crucial 200-day simple moving average (SMA), a key indicator of long-term trends. This trendline, which has characterized the downtrend since early June highs, signals a positive momentum for traders, according to CoinDesk data. Additionally, Trump-themed Polifi tokens, which blend politics and finance, have also surged.
Trump’s Crypto Strategy
In recent months, Trump has pivoted to support crypto to outmaneuver his rival, Joe Biden, and win over the crypto community seeking a friendlier regulatory environment. Bitcoin and the broader crypto market are now seen as bets on Trump’s victory. The former president is set to speak at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27.
Market Reactions
Greg Magadini, director of derivatives at Amberdata, noted in an email, “The biggest fundamental news over the weekend was the Trump assassination attempt. Absolutely insane. This has improved the odds of a Trump presidency. Trump being the pro-crypto president should help galvanize the cryptocurrency bids.”
Global Financial Impact
The Chinese yuan (CNY) traded lower against the U.S. dollar due to the potential for higher trade tariffs if Trump wins. Earlier this year, Trump suggested revoking China’s “most favored nation” status for U.S. trade and imposing tariffs of over 60% on Chinese goods. The Mexican peso (MXN) also fell, reflecting Trump’s historically tense relations with Mexico.
U.S. Financial Markets
Prices for futures tied to the 10-year Treasury note declined, hinting at higher yields. A Trump return to the White House would likely mean more spending, tax cuts, and higher budget deficits. Investment banks are betting that a Trump victory would steepen the currently inverted yield curve, historically leading to broad-based risk aversion in financial markets.
Stock Market and Dollar Index
As of writing, S&P 500 futures traded 0.18% higher, signaling a positive open on Monday despite disappointing economic growth figures from China affecting Asian stocks. The dollar index, tracking the greenback’s value against major fiat currencies, traded 0.10% higher at 104.19, according to TradingView.
