Markets
Bitcoin (BTC) Reclaims 200-Day Average as ‘Trump Trades’ Return to Vogue After Weekend Attack
Assets tied to the likelihood of US Republican candidate Donald Trump winning the November 4 election are facing renewed volatility following an assassination attempt on the former president on Saturday.
Bitcoin (BTC) has risen 7% to $62,500 since the weekend attack, which boosted the probability of the pro-crypto candidate winning the election is 70% on Polymarket.
The leading cryptocurrency by market cap has broken above the crucial 200-day simple moving average (SMA), a widely tracked indicator of long-term trends and a trendline that characterizes the downtrend from early June highs in a positive sign for momentum traders, CoinDesk data shows. Trump-themed Polifi tokens, marking the intersection of politics and finance, also surged.
In recent months, Trump has reversed course and embraced cryptocurrency to outflank his rival, Joe Biden, and win over the supposedly single-issue crypto community, which is seeking a more industry-friendly regulatory environment. As such, bitcoin and the broader crypto market have become bets on a Trump victory. The former president is set to speak at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27.
“The biggest fundamental news of the weekend was the assassination attempt on Trump. Absolutely insane. This improved the odds of a Trump presidency. Trump being the pro-crypto president should help galvanize crypto bids,” Greg Magadini, head of derivatives at Amberdata, said in an email.
Elsewhere, the Chinese yuan (CNY) traded lower against the US dollar as a potential Trump victory could mean higher trade tariffs. Earlier this year, Trump suggested revoking China’s “most favored nation” status for trade with the US and imposing tariffs of more than 60% on Chinese goods. The Mexican peso (MXN) also fell due to Trump’s strained relations with the Latin American nation during his previous presidential reign.
Futures prices tied to the 10-year Treasury note have fallen, suggesting higher yields as Trump’s return to the White House would mean more spending, tax cuts and larger budget deficits. Several investment banks are betting that Trump’s potential victory would get steeper the currently inverted yield curve in the coming months. Historically, the steep incline has led to widespread risk aversion in financial markets.
Futures linked to the S&P 500 were trading 0.18% higher at the time of writing, signaling a positive open on Monday even as Asian stocks fell on disappointing economic growth figures in China. The dollar index, which tracks the value of the greenback against major fiat currencies, was trading 0.10% higher at 104.19, according to TradingView.