A Trump victory in the November 5 U.S. presidential election could boost crypto markets temporarily, according to analysts, but caution is advised amid high volatility.
Potential Impact of a Trump Win on Crypto
Many in the crypto industry anticipate that a Trump win could trigger a short-term crypto rally, similar to a “dopamine hit,” as Swyftx lead analyst Pav Hundal. Hundal noted, however, that traders should expect heightened market fluctuations around election day.
Derive founder Nick Forster echoed this sentiment, advising caution and noting that significant volatility is already priced in. Forster pointed out that while some traders may expect gains, risks remain high. Data from Derive suggests that traders are preparing for substantial price swings around election day, with increased buying of call options hinting at a “buy the rumor” approach that could quickly pivot to a “sell the news” scenario.
Crypto Market Movements Pre-Election
Since October 23, Bitcoin has gained 7.6%, reaching $72,432 and coming close to its all-time high from March. Despite the election’s significance, Hundal believes that the outcome won’t be the determining factor for Bitcoin reaching six figures. He shares the view of 10T Holdings founder Dan Tapiero, who predicts that Bitcoin will hit $100,000 by year-end, regardless of who wins.
Analysts Advise a Diversified Approach
Forster suggested that a “diversified strategy” incorporating hedging options may be the best approach for traders, given the market’s sensitivity to U.S. and global events. Hundal added that traders should avoid trying to time trades around the election unless they are experienced investors. According to him, the market could experience a “whipsaw” effect with initial volatility but maintains a strong foundation for continued growth.
FalconX’s head of research, David Lawant, agrees that Bitcoin is likely to perform well regardless of the election outcome, as noted in an October 21 report. This consensus points to potential long-term growth, with or without immediate political impacts.
