Bitcoin’s price dropped more than three percent in recent days from a near record high, moving in parallel with a decrease in former President Donald Trump‘s chances of winning the upcoming presidential election.
Bitcoin was priced around $70,400 early Friday, according to CoinDesk, down from $72,723.76 on Tuesday when it looked to be heading towards surpassing its record high of $73,084. At the same time, Trump’s odds of winning the race to the White House have dropped, according to PredictIt, an online prediction market.
Trump has promoted policies favorable to digital assets, envisioning the U.S. as a leader in the crypto industry, which has drawn support from certain parts of the market. His Democratic opponent Kamala Harris meanwhile, while supportive of the industry, has taken a less laissez-faire approach. The vice president said in September that she would encourage digital assets “while protecting our consumers and investors.”
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“While Bitcoin would likely fall if Harris wins the election, its response to a Trump presidency is harder to gauge,” Ed Yardeni of Yardeni Research said in a note shared with Bloomberg.
Political and digital currency experts who spoke with Newsweek were also uncertain as to whether there was a direct link between Trump’s election performance and the price of cryptocurrencies.
“We have seen fluctuations in Bitcoin with various announcements by Trump and he has certainly embraced the industry with a lot of enthusiasm,” said Catherine Mulligan, advanced research fellow at Imperial College London’s Institute of Security Science and Technology.
Mulligan added that the links between Trump’s ratings and the price of Bitcoin should be seen as a “wakeup call” for not just those who buy and sell the asset, but those in governments and regulators.
Thomas Gift, who heads the Center on U.S. Politics at University College London, U.K., argued that Bitcoin’s performance is tied to too many factors to pin its recent drop on Trump’s odds of winning.
“We know that Bitcoin is one of the most volatile commodities there is, and it’s not clearly correlated with political business cycles,” Gift said.
“While bets on the upcoming U.S. election could have some impact on Bitcoin’s price, so could many other factors, especially projections about global liquidity, Federal Reserve policy, and other international macro trends.”
What Has Donald Trump Said About Cryptocurrency?
Donald Trump has shown a significant shift in his stance toward cryptocurrency over recent years, now embracing it as part of his campaign platform. At a recent appearance, he committed to making the U.S. the “crypto capital of the planet,” aligning himself closely with Bitcoin advocates and pledging to boost the digital asset sector. He proposed that if elected, he would include Bitcoin in a “strategic reserve,” akin to the national gold reserves, to help reduce national debt and stabilize the economy.
Previously, Trump criticized Bitcoin as a “scam” in 2021, but he now opposes central bank digital currencies (CBDCs), which he claims pose a threat to U.S. financial stability. This pro-crypto stance includes opposition to strict regulatory measures, contrasting sharply with the approach of his opponent, Kamala Harris.
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