With recent polls showing former President and Republican candidate Donald Trump gaining traction against Vice President Kamala Harris, there were rising hopes for a potential rebound in Bitcoin prices. However, the upward trend observed in late September and early October has diminished, as analysts link this to tightening financial conditions that may impact the overall cryptocurrency market.
Impact of Trump’s Campaign and Rising Yields on Bitcoin Prices
A recent report by Bloomberg suggests that Bitcoin is increasingly being associated with Trump as global markets react to his possible return to the presidency.
At the same time, the financial environment is evolving, with increasing bond yields and a strengthening dollar aligning with Trump’s growing support in prediction markets. Experts believe that a Trump win could lead to a pro-growth economic agenda, potentially tightening monetary policy.
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Market analysts like Tony Sycamore from IG Australia Pty highlight that the ongoing selloff in stocks and the stronger US dollar, along with rising yields indicate tightening financial conditions.
The analyst notes that such an environment generally presents challenges for Bitcoin prices and the overall crypto market, which typically thrives in a more liquid financial setting.
Sycamore added that while the initial monetary conditions were already quite loose, the rapid pace of tightening represents a significant risk to Bitcoin and other risk assets as Trump’s chances of winning the White House increase.
Could Trump’s Return Bring Regulatory Easing?
Trump’s campaign has actively courted the cryptocurrency sector, vowing to establish the US as the “crypto capital of the world.” This approach stands in stark contrast to Harris’s more cautious viewpoint, which advocates for a regulatory framework that supports industry growth while ensuring consumer protection.
A recent Bloomberg News/Morning Consult poll indicates that Trump and Harris are statistically tied among likely voters in critical swing states, suggesting that the upcoming election may depend on targeted advertising, rallies, and grassroots campaigns—all of which could sway market sentiment.
Within the cryptocurrency market, investors seem to be increasingly wagering on a Trump victory using Polymarket. Current polls show Trump leading with 62% support against 38% for Vice President Kamala Harris, which marks the largest lead since the campaign began.
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If Trump emerges victorious in the upcoming election, Bloomberg notes that experts anticipate a potential yield increase, which could adversely affect risk assets, including Bitcoin’s price performance.
Caroline Mauron, co-founder of Orbit Markets, observes that even though higher yields may present challenges, the expected regulatory easing under a Trump administration could play a crucial role in shaping the cryptocurrency landscape.
Despite possible economic hurdles that might negatively influence Bitcoin’s performance, Mauron concludes that the shifting regulatory framework could help Bitcoin and other digital assets regain stability.
As of now, Bitcoin is trading at $67,670, reflecting a 2.4% increase over the past 24 hours.
Featured image from DALL-E, chart from TradingView.com
