What to expect from cryptocurrency trading on the day of the US presidential election: Standard Chartered version
On Tuesday next week, the most important event of the political arena of the United States and the world as a whole will take place – the election of a new president. For the first time in history, the election is tangibly connected with the crypto industry, because its outcome will definitely affect its development. From the point of view of crypto enthusiasts, the best candidate for victory is Republican Donald Trump, who promises to introduce proper regulation of digital assets in the country, as well as to reduce pressure on the industry as a whole. That said, in the short term, the election could have a negative impact on the price of Bitcoin.
Today, Bitcoin is trading below $70,000. The cryptocurrency has fallen in price by 3.8 percent over the past 24 hours.
Hourly chart of the Bitcoin BTC rate on the Binance exchange
Against the backdrop of volatility on exchanges, large-scale liquidations of trading positions of traders who used borrowed capital for transactions were recorded. Their volume reached $286 million, most of which came from long positions. The authors of the latter bet on the market growth, but eventually lost money.
The volume of liquidations of trading positions in the cryptocurrency market over the past day
One of the reasons for the market collapse is the reports about Iran’s preparation of a large-scale retaliatory strike against Israel. And as noted by representatives of Axios, it will happen within a few days from the territory of Iraq.
Well, possible problems in geopolitics usually make traders close their own positions and exercise caution.
How will Bitcoin be traded?
Jeff Kendrick, Head of Digital Asset Research at Standard Chartered, predicts a Bitcoin correction closer to Tuesday. And it should be followed by a noticeable surge in volatility, i.e. the variability of digital asset rates, the analyst believes.
Standard Chartered bank logo
According to him, before the election, almost everyone has already made their bets on the future BTC rate, so we can expect noticeable fluctuations on the market after the event itself. Here is a rejoinder on the subject.
There is a risk of mass closing of traders’ positions before the election, which means that the probability that we will be below $73,000 on election day, not above.
Bitcoin got to the 73k level on Tuesday. After that, the cryptocurrency went into a drawdown phase.
Bitcoin and other cryptocurrencies are on the rise
Kendrick noted that as the election approaches, the seven-day premium on Bitcoin options compared to the 30-day premium should continue to rise.
This is due to the fact that it will take a few days to get the full election results. The options market has definite opportunities to get implied volatility close to real volatility during high-profile events like ETF launches and the upcoming U.S. election.
According to The Block’s sources, Kendrick is also leaning more towards the Republican side.
Former US President Donald Trump
Bitcoin’s price has a better chance of rising if Republicans are elected to the US Congress. According to the expert, this could lead to the digital asset reaching the $125,000 level by the end of the year and become a catalyst for the start of a new season of altcoins, that is, a period of growth of coins with the exception of Bitcoin, which has happened before. He continues.
We believe that a Republican victory will be particularly helpful for Solana in this regard as well.
Change in the value of Solana SOL cryptocurrency over the year
Since the beginning of 2024, the price of the Solana altcoin (SOL) has risen by 63 per cent, while the coin’s exchange rate has jumped by 303 per cent over the past year. This is due to several factors.
Firstly, the Solana network is characterised by high throughput and transaction speed, which traditionally attracts the attention of developers and users. Secondly, the launch and popularisation of Solana-based memcoins have contributed to increased activity on the network and increased demand for the SOL coin, which is used to pay transaction fees in this blockchain.
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One of Trump’s campaign promises was to appoint a new head of the SEC to replace current head Gary Gensler. The latter is remembered for numerous lawsuits against cryptocurrency companies and constant pressure on the industry.
The losses from his actions were even calculated in monetary terms. In particular, members of the non-profit organisation Blockchain Association believe that Gensler’s activities have caused the industry losses of at least $400 million. Here’s a rejoinder on the matter.
According to anonymous sources, the U.S. digital asset industry has spent a combined total of more than $400 million defending itself against the SEC and Chairman Gensler. Jobs, potential innovation, and American investment have also been lost as a result.
In addition to defences, companies are also spending money to pay fines. For example, in February, cryptocurrency exchange Kraken paid $30 million to settle SEC claims. The latter concerned a staking option for U.S. residents, which was eventually disabled.
Former US President Donald Trump
The advocacy group said the $400 million figure was a “small slice of the industry” because it was taken from a sample of Blockchain Association members. Specifically, this group includes Ripple, Coinbase, Crypto.com, Grayscale, Kraken and other major industry players.
Recall, Gary Gensler became head of the SEC in April 2021 and since then has maintained that all cryptocurrencies with the exception of Bitcoin are securities. On top of that, the regulator requires cryptocurrency firms to register separately and follow rules.
As part of this approach, the SEC has brought a number of cases against major firms over the years, including Coinbase, Kraken and Binance. Some members of the crypto industry have fought back and filed retaliatory lawsuits against the Commission. For example, this was done by the Crypto-com exchange in early October, which received a so-called Wells Notice from the SEC and soon went to court for protection.
Next week will prove to be very important for all financial markets and the cryptocurrency niche in general. Still, such large-scale events can easily cause volatility. That means investors should be cautious.
Look for more interesting information in our cryptocurrency chat room. We look forward to seeing you there to keep you up to date on what is happening inside the niche of coins and blockchain platforms.
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