The price of Bitcoin has surpassed $70.000 per unit as the US presidential election unfolds.
The US presidential election has started today, November 5, 2024, and this event is not only crucial for the country’s political future but also has significant repercussions on the cryptocurrency market.
With the race between Republican candidate Donald Trump and Democrat Kamala Harris, markets are on alert, especially the crypto sector.
As the election day unfolds, Bitcoin has shown a remarkable recovery, surpassing $70.000. This occurs after having touched a price of $66.800 per BTC, yesterday. This increase, which represents a 4,7% rise in the price of Bitcoin, is capturing the attention of traders, who are operating a daily trading volume of more than $43.000 billion dollars with this cryptocurrency.
Source: CoinMarketCap
The expected volatility in the Bitcoin and cryptocurrency market
Volatility, a constant in the world of cryptocurrencies, is becoming more pronounced with today's elections in the United States. Analysts have anticipated a period of significant fluctuations in the price of Bitcoin and other cryptoassets in the context of such a polarized electoral event. The contest between Trump, who has adopted an openly pro-crypto stance, and Harris, who has promised to establish a more moderate regulatory framework for digital assets, has generated uncertainty among users and investors.
As what he pointed Bloomberg recently highlighted the impact of this uncertainty in Bitcoin exchange-traded funds (ETFs).
This Monday, Bitcoin ETFs listed on US stock exchanges recorded Its largest daily net outflow to date, totaling $579,5 million.
According to analysts at Bloomberg, which specializes in finance and business, this capital outflow from spot ETFs is indicative of the caution felt by many investors regarding the possibility of drastic changes in the country's regulatory environment, depending on the election result.
Source: SoSo Value
Bitcoin spot ETFs, run by large institutions such as BlackRock and Fidelity Investments, have been popular vehicles for institutional investors to access the cryptocurrency. They currently accumulate More than $67.400 billion in assets under management, which demonstrates its great success. However, in recent days, these investment funds have been registering outflows as the volatility of the crypto market increases and investors adopt more conservative positions.
Paul Howard, a senior director at Wincent, told Bloomberg that the most significant changes in U.S. policy and the direction Bitcoin and cryptocurrencies will take won’t be seen until after official election results are known and cabinet appointments are finalized, suggesting market volatility could be higher in the coming days.
These statements align with the perspectives of other analysts, such as Bernstein, who estimate that the price of Bitcoin could fluctuate between $50.000 and $90.000 in the period between today and the inauguration of the new president-elect on January 20, depending on who wins the electoral contest.
Investors' expectations and realities
The possibility that one of the candidates implements favorable policies for cryptocurrencies could influence the direction of the market in the short and medium term.
Bitcoin has had an impressive performance this 2024, with an appreciation of more than 65% to date, outperforming other assets such as stocks and gold. This growth has been driven in part by the inflow of capital into Bitcoin ETFs, which have made this asset easier for a wider audience to access. However, the recent outflow of funds from these financial instruments could be an indication that investors are reconsidering their strategies as electoral events unfold.
Therefore, as election results start to come in, all eyes will be on how the cryptocurrency market will react. Political uncertainty and possible future regulation of these digital assets in the country are factors that will influence investor confidence and the performance of assets like Bitcoin.
