Assets linked to a possible victory for US Republican candidate Donald Trump in the November 4 elections are again seeing volatility following the former president’s assassination attempt on Saturday.
Bitcoin (BTC) 7% to $62,500 after the weekend attack, raising the probability of a pro-crypto candidate winning the election on Polymarket to 70%.
The leading cryptocurrency by market value has broken above the key 200-day simple moving average (SMA), a widely watched gauge of long-term trends, and a positive sign for trend traders that characterized the decline from the highs since early June, CoinDesk data show. The Trump-themed Polifi tokens, which represent the intersection of politics and finance, have soared.
In recent months, Trump has embraced crypto to outdo his rival, Joe Biden, and to win over the single-issue crypto community, which is seeking a friendlier regulatory environment for the industry. Thus, Bitcoin and the broader crypto market have become challenges to Trump’s victory. The former president is committed to speaking at the Bitcoin 2024 conference in Nashville, Tennessee on July 27.
“The biggest fundamental news of the weekend was the Trump assassination attempt. Absolutely insane. This has improved the odds for a Trump presidency. A pro-Trump crypto presidency should help boost cryptocurrency bids,” Greg Makadini, director of derivatives at Amberdata, said in an email.
Elsewhere, the Chinese yuan (CNY) traded lower against the US dollar as a Trump victory could mean higher trade tariffs. Earlier this year, Trump suggested revoking China’s “most favored nation” status for US trade and imposing tariffs of more than 60% on Chinese goods. The Mexican peso (MXN) also slipped due to strained relations with the Latin American nation during Trump’s previous presidency.
Prices for futures tied to the 10-year Treasury note fell, signaling higher yields as Trump’s return to the White House could mean more spending, tax cuts and higher budget deficits. Many investment banks are betting that a potential Trump victory will push the currently inverted yield curve higher in the coming months. Historically, sharp steepness has led to broad-based risk aversion in financial markets.
Futures linked to the S&P 500 were trading 0.18% higher at the time of writing, marking a positive open on Monday, even as Asian stocks fell on the back of disappointing economic growth figures in China. The dollar index, which tracks the greenback’s value against major fiat currencies, rose 0.10% to trade at 104.19, according to TradingView.
