Bitcoin Plays Election 🗳️
Trump's odds tumble, Harris gains ground. Bitcoin shivers with two days to go for US elections. Prediction markets are in chaos. Mt. Gox spooks the market. JPMorgan favours both Gold and Bitcoin.
Happy Monday, y'all. Today’s crypto dose of Token Dispatch takes you through the crypto euphoria building up to the election day.
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A day till the US votes.
Two days till results (hopefully).
And a whole lot of volatility around it.
Remember last week's euphoria? When we were just $175 away from an all-time high?
Well, things change fast in crypto. Especially when there's an election around the corner.
Now we are back at $68K.
The correlation is so tight that crypto traders are starting to joke about using Polymarket as their primary technical indicator.
This correlation isn't entirely surprising. The former president has, after all, undergone quite the crypto evolution.
Let's talk promises.
Read: If Trump Wins …🗳️
The Trump transformation
Pledged to make US the "world capital of crypto"
Promised to fire SEC's Gensler "on day one"
Backed DeFi project World Liberty
Multiple NFT collection launches
Strong stance against CBDCs
Support for Bitcoin mining
Plans for crypto advisory council
Read: Trump's WLF: Triumph or Fiasco? ⚠️
Harris, meanwhile, played it subtle until October
Promised pro-crypto regulatory framework
Commitment to blockchain innovation
More open stance than Biden administration
Reaching out to crypto leaders like Mark Cuban
Focus on retail investor protection
Support for emerging technologies
Plans for inclusive crypto policies
Read: Who Will Win the Crypto Game? 🏹
The Trump effect is fading
Kalshi showing a similar trend.
Until last week, prediction markets were painting a clear picture: a comfortable Trump lead that had crypto traders feeling optimistic enough to push Bitcoin within striking distance of its all-time high.
Then came the Ann Selzer poll
If you're not familiar with Selzer, she's the polling equivalent of a crypto oracle – one of the few who saw Trump's 2016 victory coming.
When her latest numbers showed Harris leading in Iowa – a state Trump won twice – the crypto market's confidence cracked.
On Polymarket, Trump's odds tumbled 13 percentage points in just a few days. Over at Kalshi, a CFTC-regulated prediction market that just added USDC support, Harris briefly took the lead.
The platform has now handled over $3 billion in election-related trading volume.
Read: Can Polymarket Whales Sway US Voter Sentiment? 🐋
The manipulation question
In 2008, an institutional investor dumped hundreds of thousands into prediction markets to boost John McCain's apparent chances.
In 2012, someone lost $4 million trying the same trick for Mitt Romney.
This time around, a French trader named Théo has placed $30 million in bets on Trump's victory.
Théo, who stands to make $80 million if Trump wins, insists his massive positions are purely financial plays, not political ones.
He claims his analysis shows the polls are underestimating Trump, putting his odds of victory at 80-90%. It's either brilliant trading or the most expensive political statement since Sam Bankman-Fried's campaign donations.
The Volatility Vortex
As prediction markets gyrate, Bitcoin's implied volatility has shot up to its highest level since July - 3-month high. 74.4% implied volatility for election week.
The Deribit volatility index suggests traders are pricing in potential swings of nearly 10% in either direction following Tuesday's results.
This anxiety isn't confined to crypto.
The US Treasury's MOVE index has jumped to levels not seen since October 2023, and EUR/USD implied volatility is testing highs last seen during the March 2023 banking crisis.
When traditional markets get nervous, crypto tends to get absolutely jittery.
On November 3, over $315 million in crypto positions were liquidated in just 24 hours as traders scrambled to recalibrate their election bets.
Of that, $250 million were long positions – suggesting many traders were caught off guard by the market's sudden bearish turn.
How’s it looking at the moment?
What are the experts saying?
David Lawant, FalconX Head of Research.
"After six months of directionless trading, markets appear eager to move past election uncertainty toward firmer ground."
On potential chaos: "Additional volatility could emerge if results are too close to call and it takes too much time to reach an outcome."
Nick Forster, Derive.xyz Founder.
"This escalation reflects traders are bracing for the election results, which could sway market prices substantially."
Daan Crypto Trades.
"There's a good possibility of at least a 10% move to either direction depending on who ends up winning the election this week."
Alan Santana, Trading Expert.
"Two instances earlier this year produced 5 days red ... This can signal that a sudden surprise reversal will happen ... Or, we will witness the biggest crash in years. The latter is the most likely scenario."
Before we enter the panic mode, election months (November) usually give crypto green. And let’s hope the same happens this month, regardless of the results.
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Block That Quote 🎙️
JP Morgan Analysts
"Rising geopolitical tensions and the coming US election are likely to reinforce what some investors call the 'debasement trade' thus favouring both gold and Bitcoin."
Why this matters?
Traders hedging against weakening currencies
Gold hitting new ATH at $2,483
Bitcoin just 5% away from its peak
Geopolitical uncertainty driving both assets
Trump victory could amplify the trend
Debasement trade? It's when investors protect themselves against:
Weakening currencies
Geopolitical headwinds
Growing government deficits
And guess what? Both digital and physical gold are winning.
In The Numbers 🔢
500 BTC
That's how much Mt. Gox just moved in the dead of night.
Breaking it down.
31.78 BTC to one wallet
468.24 BTC to another
Worth $35.04M total
First move since September
But here's the real number to watch: 44,905 BTC.
That's what Mt. Gox still holds. Current value? $3.1 billion.
Remember Mt. Gox's glory days?
World's largest exchange in 2010
Lost 850,000 BTC in 2014
Thousands still waiting for refunds
Repayment deadline? Extended to Oct 2025
Ten years later, and those ghost wallets are still moving markets.
The Surfer 🏄
Vivek Ramaswamy, a Trump advisor, is integrating Bitcoin into his $1.7 billion asset management firm, Strive Asset Management, as part of a new wealth management initiative. The firm aims to make Bitcoin a standard part of investment portfolios for everyday Americans, citing economic factors like rising debt and inflation as reasons for its inclusion.
In October 2024, cryptocurrency losses from hacks and exit scams totalled $129.6 million, primarily driven by significant incidents including a $50 million hack of Radiant Capital and a $36 million phishing attack targeting a crypto user.
In November 2024, crypto projects are set to unlock about $2.68 billion in tokens, with significant releases from Memecoin, Aptos, Arbitrum, Avalanche, and Optimism. Memecoin will unlock 3.45 billion coins for airdrops, while Aptos will release 11.31 million tokens valued at $93 million.
The US has tightened restrictions on foreign-owned crypto mining operations by expanding the Committee on Foreign Investment in the United States' (CFIUS) authority to review transactions near military installations.
UBS has joined BlackRock and Franklin Templeton in tokenisation by launching its first tokenised investment fund, the UBS USD Money Market Investment Fund Token (uMINT), built on Ethereum.
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So long. OKAY? ✋
Mt. Gox's moves are a reminder of crypto’s wild past and how it still influences today’s market.
Crypto’s reaction to election drama and economic trends highlights its role as a hedge. It’s maturing beyond just being a 'risky asset.