This article is available in Spanish.
As the United States approaches the presidential election on Tuesday, November 5, 2024, the Bitcoin market is bracing for significant volatility. Ahead of the election, Bitcoin rose to a high of $73,620 on Tuesday, likely reflecting investor optimism about a possible victory for former President Donald Trump. However, on Friday, the BTC price corrected, dropping to $68,830 amid more cautious, risk-averse sentiment as the elections approach.
How to Trade Bitcoin During the US Elections
Alex Krüger, an Argentinian economist and renowned crypto analyst, shared his strategic framework for trading Bitcoin during the US election period via his X account. Krüger outlined scenarios based on possible election results, highlighting that a Trump win could push Bitcoin to $90,000 by the end of the year with a 55% probability, while a win for Vice President Kamala Harris could see it Bitcoin would settle around $65,000 with a 45% probability. He emphasized that timing will matter: “Expect the move to be quick if Trump wins. Markets rarely wait for laggards in binary events that are not largely front-run.”
Krüger also noted that the current Bitcoin price, which he expected to be between $65,000 and 68,000 ahead of election night, had been “overextended” in line with the odds favoring a Trump victory. He pointed to the uncertainty surrounding the election results, which depend mainly on the vote count in Pennsylvania, which could delay the announcement of a clear winner.
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“It largely depends on the census in Pennsylvania whether it is skewed or not. It could be as soon as Tuesday evening EST, or days later if the count is very tight. The sooner we get clarity, the easier it will be,” Krüger said.
In terms of market sentiment, Krüger has expressed a bullish view on stocks regardless of the election outcome, unless there is an unexpected “Blue sweep” in which Democrats secure both the presidency and the majority in Congress. He explained that “shares of Bitcoin are dragging around.”
In his personal investment strategy, Krüger revealed that he is positioned with long positions in Bitcoin and Nvidia, and plans to go long on Solana (SOL) if Trump wins. With this, Krüger is probably betting on approval of the Solana Exchange Traded Fund (ETF) in the United States.
Krüger’s analysis suggests the market has partially priced in a Trump victory, anticipating that a Trump administration could boost Bitcoin’s price. “The markets have partially priced in a Trump victory. We (the market as a whole) expect Trump to drive crypto prices higher due to increased regulatory clarity and implementation of pro-crypto policies,” the analyst wrote.
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Furthermore, he expects that Trump’s focus on higher government spending would boost economic growth in the short term, which would have a positive impact on equities – a sector closely tied to Bitcoin’s performance.
Conversely, a Harris victory would likely mean a continuation of existing policies, barring a significant Democratic victory. Krüger concluded: “Based on the betting markets and various election prediction models, Trump’s chances are in the range of 50% to 63%. Ergo, it is “safe” to assume that a Republican Party victory is far from fully priced in. Such a controversial setup is common in elections. That’s why I don’t expect to ‘sell the news’.”
At the time of writing, BTC was trading at $70,402.
Featured image created with DALL.E, chart from TradingView.com