The impact of the US election on the price of bitcoin: long-term stability, short-term volatility.

Historically, the US presidential election has had a significant impact on the traditional financial markets in the short term. In the months leading up to the election, the stock market usually experiences significant volatility due to investor uncertainty. Interestingly, once the political situation stabilizes, the stock market tends to perform better in the year following the election. This trend has also been observed in other asset classes, such as gold, as investors seekIts price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve., the demand for gold often increases during the election period, leading to price surges.

As the cryptocurrency market has grown into a trillion-dollar industry, it is increasingly influenced by macroeconomic factors, including US political events. Monetary policy decisions by the Federal Reserve, such as changes in interest rates, continue to have far-reaching effects on bitcoin and other cryptocurrencies. Additionally,Non-farm employmentand the Consumer Price Index (CPI), which are commonly used economic data to measure Federal Reserve policy, can trigger significant short-term market volatility. Cryptocurrency investors must now consider these macroeconomic factors as key elements of their investment strategies.

In recent years, cryptocurrency companies have become important political donors, aiming to influence legislation and regulations favorable to the industry. Worth noting is that in the lead-up to the 2024 US presidential election, the industry donated a record-breaking $94 million. Companies like Coinbase and Ripple Labs donated $20.5 million and $20 million, respectively. These donations are not only intended to shape the political views of cryptocurrencies but also to protect the interests of the industry and promote public relations. Despite controversies, such as the FTX scandal involving misappropriating customer funds, political donations from the crypto industry continue to grow.

Recent events indicate that political developments will have a direct impact on the cryptos market. For example, before the events of the former President Trump in July, the price of bitcoin quickly rose by 8%. Subsequently, after subsequent events, the price of bitcoin began to decline, indicating that political sentiment will affect the prices of crypto assets. Similarly, the debates and statements of presidential candidates can also influence market sentiment and may lead to significant price fluctuations.

During the 2024 US presidential election, prediction markets such as Polymarket received significant attention. These platforms allow users to bet cryptos on various election-related outcomes, from the success rate of candidates to broader political developments. In just August, the trading volume of Polymarket reached a record-breaking $0.472 billion, reflecting high participation and interest in political gambling. The platform's popularity has attracted attention from mainstream financial media, further proving its legitimacy as an influential participant in the cryptos industry.

In conclusion, although the US presidential election has had a profound short-term impact on the cryptos market, its long-term impact is minimal. The true determinants of market performance remain technological advancements within the industry and key macroeconomic indicators. Investors should continue to focus on these factors and be prepared for the short-term fluctuations that may occur during major political events.