Bitcoin’s climb toward record highs took a pause this week, coinciding with fluctuating election odds for pro-crypto Republican nominee Donald Trump, Bloomberg reports.
After nearing its previous peak earlier in the week, the digital currency fell 4% in US markets on Thursday—the steepest drop in a month—and dipped below $69,000 during Asian trading on Friday. The drop comes as prediction markets, such as PredictIt and Polymarket, indicate a tightening race between Trump and Democratic candidate Vice President Kamala Harris.
Analysts see a connection between Bitcoin’s performance and Trump’s support in the election. Trump’s openness to the crypto industry, where he has advocated for fewer regulations and broader adoption, has led some to nickname Bitcoin a “Trump trade.” The former president has repeatedly discussed his vision of the US as a global center for digital assets, an approach that contrasts sharply with current and proposed regulatory frameworks under President Biden and Harris, who have focused on oversight and accountability in the crypto sector.
According to Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors, Bitcoin’s pullback may be due to “stalling momentum” in Trump’s election odds and a conservative investor stance ahead of the vote. Farrell suggests this “derisking” could be temporary, noting that Bitcoin’s earlier surge to $73,798 was likely fueled by Trump’s initial lead in the polls.
The industry’s preference for Trump stems largely from his supportive stance on cryptocurrencies, as evidenced by endorsements from prominent crypto advocates and campaign support from the sector. In comparison, Harris has emphasized the importance of maintaining regulatory structures, pledging to establish a framework for the digital asset industry in line with President Biden’s administration.
While Bitcoin and other assets were impacted by the Federal Reserve’s pending rate decisions next week, the outlook for Bitcoin remains positive among Trump supporters, who believe his election would stimulate growth in the industry. Despite the recent pullback, analysts highlight Bitcoin’s strong year-to-date gains and anticipate that a Trump presidency could sustain this upward trend.
