With only one week left until the election, "Trump" trades sweep the crypto market
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With only one week left until the election, "Trump" trades sweep the crypto market
One week before the election, BTC rebounds to $71,000.
Navigating Web3 tides with focused insightsAuthor: Tuoluo Finance
One week until the election.
With the U.S. presidential election approaching, as of October 27 local time, more than 41 million Americans have already cast early ballots in the 2024 election. This has intensified volatility in the crypto market. Fueled by "election trading," Bitcoin led the rally, reclaiming the long-absent level above $71,000 this week, with broad gains across the crypto sector and the MEME market deeply immersed in PolitiFi themes.
Between the two candidates, Harris and Trump, the race has grown increasingly tight. Due to public dissatisfaction over Trump’s handling of Hurricane Milton and the Israel-Iran conflict, Harris’s approval ratings have sharply declined, allowing Trump to surge ahead. He now holds widening advantages in betting odds and swing-state polls, while closely trailing in general national polling. Current indicators suggest Trump is more likely to become the next U.S. president, triggering immediate “Trump trades.”
Reviewing their policy platforms, both broadly aim to stimulate capital repatriation through government incentives, though their approaches differ. Trump emphasizes tax cuts to spur private enterprise, whereas Harris favors direct cash transfers to households. On capital flows, Harris inherits Biden’s focus on strategic industries like semiconductors and new energy, while Trump maintains his stance on aggressive tariffs and “America First” policies.
In the current environment where Trump’s victory appears more probable, financial markets are naturally focusing on his proposed policies. According to analysis from CICC (China International Capital Corporation), Trump’s main governance priorities include domestic tax cuts, foreign tariff hikes, regulatory relaxation, deportation of undocumented immigrants, promotion of fossil fuels, emphasis on technology, and diplomatic isolationism. The combined impact of these policies could heighten inflationary pressures, potentially prompting the Federal Reserve to slow rate cuts and maintain a higher terminal interest rate. For capital markets, if economic resilience persists, a soft landing scenario would benefit U.S. equities, cyclical commodities, and Bitcoin. However, in extreme cases, elevated inflation could suppress risk assets, benefiting gold and other anti-cyclical hedges.
Estimated impact of Trump's policies on the U.S. economy, source: CICC Research Institute
A precedent can be drawn from the 2016 U.S. election, when markets similarly priced in a Trump win, especially after his November victory sparked a wave of optimism. The U.S. Treasury yield rose from 1.7% to 2.6% within a month, and the dollar index surged past 103 from 97. Major U.S. equity indices gained around 10% during that period. Commodity prices also rallied on inflation expectations—copper and crude oil rose significantly—while gold reversed course, falling 3% in the month following the election.
Source: Bloomberg, CICC Research
Clearly, Trump’s 2016 win was considered a black swan event, but today, financial markets are already pricing in his potential return. Among the most notable beneficiaries are cryptocurrencies. Given Trump’s repeated public endorsements of crypto and recent launch of his family’s crypto venture, the crypto community holds particularly high hopes for him.
On the prediction market Polymarket, wagers have exceeded $2.1 billion, with Trump’s implied win probability reaching 66.2%, far surpassing Harris’s 33%, and the gap continues to widen. The Bitcoin market has responded strongly: as the election nears, Bitcoin keeps climbing, now above $71,000—with market expectations clearly contributing to the rise.
How will Bitcoin and the broader crypto market perform around the election? Institutions and analysts are actively debating the outlook.
Traders widely view the election as a key trading opportunity, predominantly betting on a post-election rebound. According to Matrixport data, U.S. election sentiment is heating up markets—the funding rate for Ethereum perpetual futures has reached its highest level since May 2024, highlighting a clear bias toward buying the dip.
Top trader Eugene Ng Ah Sio commented on social media that positioning is largely set, expecting an upward trend to begin after the election. He emphasized that speculative long positions in October have mostly been liquidated, and most investors will remain risk-averse during the first week post-election, making SOL a clear asset choice.
Derivatives markets point to similar conclusions. Luuk Strijers, CEO of Deribit, stated that derivatives traders are positioning for a bullish move in Bitcoin shortly after the U.S. election on November 5. For options expiring on November 8, open interest exceeds $2 billion, concentrated at strike prices of $70,000, $75,000, and $80,000. The put/call ratio stands at 0.55, indicating twice as many open call options as puts. Forward IV has noticeably risen compared to Mark IV, especially during the election cycle, signaling traders expect heightened volatility. The forward implied volatility is 72.29%, suggesting potential daily price swings of about 3.78% immediately after the election. Strong demand for calls over puts indicates investors are less concerned about downside risk hedging.
Institutions also hold increasingly optimistic views. Just half a month ago, Standard Chartered Bank—often labeled as eccentric by the market—stated that Bitcoin shows strong upward momentum and could approach its all-time high of $73,800 on election day. Factors driving this rally include a steepening U.S. Treasury yield curve, inflows into spot Bitcoin ETFs, and rising odds of a Trump victory. Based on current Bitcoin prices, Standard Chartered might finally be right.
Matthew Sigel, VanEck’s Head of Digital Asset Research, predicted in an interview that investors are preparing for the U.S. election, noting this year may follow a path similar to 2020: after a brief period of post-election fluctuation, Bitcoin will begin to rise, especially given Trump’s higher likelihood of winning. Bernstein reiterated that if Trump wins the U.S. election next month, Bitcoin could reach a new all-time high between $80,000 and $90,000.
Hedge fund manager Paul Tudor Jones noted that one shouldn’t fixate on the specific candidate. He believes that regardless of who takes office, policy directions will inevitably lead to inflation, further boosting BTC and other commodity prices.
Bitfinex added seasonal factors to the election narrative, suggesting Bitcoin may face turbulence in the coming weeks. Election uncertainty, the “Trump trade” narrative, and historically favorable Q4 conditions could create a perfect storm for the market. Bitfinex’s report highlights elevated premiums on options expiring around key election dates, with implied volatility expected to peak at 100-day levels shortly after the election on November 8. Historically, the fourth quarter in halving years has ended with gains, averaging a median quarterly return of 31.34%. Post-election dynamics could push Bitcoin to reach or even exceed its all-time highs.
Of course, despite widespread bullish sentiment among institutions and traders, some analysts warn that short-term speculation may be shortsighted. Jean Boivin of BlackRock Investment Institute pointed out that markets may underestimate the risk of either candidate contesting the election results, which could trigger weeks of legal battles and negatively impact risk assets.
Copper analysts went further, stating the market may currently be at a temporary pre-election top, citing on-chain Bitcoin data showing that 98% of short-term holder wallet addresses are now in profit. Historically, such high profitability often leads investors to take profits, resulting in rapid selling pressure.
Across the entire crypto market, sentiment remains unchanged—but macro drivers influencing crypto performance are shifting from monetary policy to the U.S. election outcome. The crypto market clearly favors Trump, whose policy agenda could also lift Bitcoin-linked assets such as U.S. equities. Therefore, according to many analyst forecasts, Bitcoin stands a strong chance of breaking new highs during this trading cycle.
Even beyond crypto, other financial sectors have shown similar signals since September, when Trump’s chances of victory began rising. Given Trump’s aggressive tariff proposals—including a flat 10% duty on all imports to the U.S. and up to 60% or more on Chinese goods—recently weakened currencies include the RMB, Mexican peso, and Vietnamese dong. In traditional energy sectors favored by Trump, CICC Research data shows that since September 26, oil and gas energy stocks have surged 5.8%, while clean energy indices plunged 9.4%. On social media, shares of Trump Media & Technology Group (DJT) have soared an astonishing 289.79% since September 23, clearly reflecting market positioning.
However, current movements only reflect pre-election positioning—expectations are a key driver now, but once realized, they may lead to a short-term pullback. Additionally, even if Trump assumes office, his ability to implement policies depends on Congress, particularly the House, which controls fiscal legislation—otherwise he risks facing legislative gridlock just as Biden did. Yet according to the latest polling from the seasoned political forecasting site FiveThirtyEight, Trump’s odds of winning this year’s presidency have risen to 53%. The GOP has an 87% chance of flipping the Senate and a 53% chance of retaining control of the House—increasing the likelihood of a Republican sweep. From both White House and congressional perspectives, Democrats now face peak competitive pressure.
Regardless, significant market volatility before and after the U.S. election is inevitable. All those betting on trading opportunities should remain vigilant. In elections, nothing is certain until the final vote is counted—and even then, disputes over legitimacy may persist.
During this period, Bitcoin and MEME coins may remain the most active players in the crypto market.
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