In the lead-up to the U.S. presidential election, current market sentiment suggests that a victory for Donald Trump would be bullish for crypto assets, while a win for Kamala Harris is perceived as bearish.
What Happened: A Bernstein report on Monday highlights the emergence of Polymarket, a crypto-based prediction market, as a key indicator of election trends.
With over $500 million in bets placed, Polymarket has become the most liquid election market this season, capturing over 80% market share.
As of the latest data, Polymarket odds show Harris leading Trump by approximately 6%, with Harris at 52% and Trump at 46%.
This shift in favor of Harris has coincided with a period of weakness in the crypto markets, with Bitcoin (CRYPTO: BTC) unable to reclaim its previous June highs of around $70,000.
Bernstein analysts noted this correlation, highlighting that a Republican win is seen as likely to provide tailwinds.
The Trump campaign has been vocal about its pro-crypto stance, promising favorable policies for Bitcoin and crypto innovation.
In contrast, the Harris campaign's approach to crypto regulation is perceived as less clear, leading to some uncertainty in the market.
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Why It Matters: The report also compares Polymarket trends with traditional polling data, noting that both currently show a close race.
However, Polymarket's liquidity in swing state predictions remains relatively thin compared to its national outcome markets.
Analysts expect the Bitcoin market to remain range-bound until clearer election signals emerge, likely closer to the presidential debates in September.
The cryptocurrency recently touched $61,000 before selling off to around $58,000 and recovering back above $59,000, reflecting the market's current uncertainty.
As the election approaches, market participants will be watching closely to see if blockchain-based prediction markets like Polymarket prove to have more predictive power than traditional polls, and how the crypto market reacts to these signals.
What's Next: The evolving relationship between the U.S. election and cryptocurrency markets will also be a key topic at Benzinga's Future of Digital Assets event on Nov. 19, where experts will discuss the broader implications of political outcomes on digital assets and blockchain technology.
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