History Suggests Crypto’s Bullish Momentum Should Continue Into the U.S. Election and Afterwards

With
less
than
three
weeks
until
the
U.S.
presidential
election,
traders
are
positioning
themselves
for
what’s
to
come
after
Nov.
5
and
how
a
new
administration
will
respond
to
factors
affecting
financial
markets,
including
crypto.

Crypto
has
been
in
an
uptrend
over
the
past
week,
with
Chinese
stimulus,
Western
central
bank
rate
cuts,
and
perhaps
the
U.S.
elections
coming
into
clearer
focus
among
the
reasons
cited
for
recent
gains.

While
cryptos
have
only
really
been
popular
assets
for
one
presidential
election
in
the
past
(2020),
the

second
half
of
October
typically
marks
the
beginning
of
a
bullish
period
for
financial
assets
like
stocks,
so
crypto’s
move
of
late
is
perhaps
not
that
unusual.

Indeed,
a
look
at
bitcoin

(BTC)
shows
the
second
half
of
October
(16-31)
produces
double
the
returns
of
the
first
half
of
the
month
(1-15),
according
to
Coinglass
data
from
2013
to
2023.

Data
from
ETC
Group,
part
of
Bitwise
Asset
Management,
showcased
the
uncertainty
of
token
prices
depending
on
election
results.

Using
an
implied
performance
against
a
theoretical
value,
ETC
Group
found
bitcoin
could
move
up
to
10%
in
either
direction
based
on
the
election.
Given
the
current
spot
price
just
shy
of
$68,000,
a
10%
upside
move
would
mean
a
new
record
high,
surpassing
March’s
$73,697.
The
team
also
found
that
the
impact
of
the
election
would
likely
have
the
greatest
effect
on
Cardano

(ADA)
and

Dogecoin

(DOGE),
with
a
18%
and
20%
moves,
respectively.

In
addition,
data
from
Ycharts
looking
at
presidential
election
years
since
1950
shows
the
stock
market
tends
to
bottom
out
in
September
and/or
October
and
then
rally
into
November.
So
far,
we’re
seeing
just
that
with
the
S&P
500
and
Nasdaq,
each
of
which
have
been
on
the
rise
since
early
last
month.

Looking
beyond
the
U.S.
election,
the

options
market
shows
a
bullish
bias
towards
bitcoin
with
the
majority
of
call
open
interest
at
the
$70,000
and
$80,000
strike
prices.
These
strike
prices
are
worth
$141
million
and
$120
million
in
notional
value,
respectively,
for
the
Nov.
29
expiry.

The
Dec.
27
expiry
has
an
even
more
bullish
bias,
with
the
majority
of
call
open
interest
at
the
$100,000
strike
price
worth
over
$620
million
in
notional
value,
according
to
Deribit
data.

“As
we
approach
the
US
election
with
Trump
as
the
most
likely
outcome
and
even
Harris
looking
okay
from
a
digital
asset
perspective,
the
broader
digital
asset
ecosystem
is
indeed
becoming
more
likely
to
become
mainstream,”
Geoffrey
Kendrick,
global
head
of
digital
asset
research
at
British
multinational
bank
Standard
Chartered,
wrote
in
a
note
on
Tuesday.

“For
BTC
this
means
a
bleed
up
towards
the
all-time
high
of
$73,000
looks
likely
pre-election.”