Bitcoin fell below $69,000, marking its largest drop in a month after the odds for Republican candidate Trump, who supports cryptocurrencies, decreased. Trump's lead has narrowed on election betting sites, raising concerns about his campaign prospects. Meanwhile, U.S. stocks also experienced a sharp decline, with the market remaining cautious ahead of the election vote and the Federal Reserve meeting
According to the Zhitong Finance APP, as the campaign odds for Republican candidate Donald Trump supporting cryptocurrency decline in the betting market, efforts for Bitcoin to reach record highs seem to be faltering. On Friday, Bitcoin fell below $69,000, marking a 4% drop in the U.S. the previous day, the largest decline in a month. Meanwhile, Trump's lead over Democratic Vice President Kamala Harris on election betting sites like PredictIt, Polymarket, and Kalshi is also narrowing.
Given the former president's enthusiasm for the crypto industry, which spent heavily to promote its agenda during the campaign, Bitcoin has been referred to as the "Trump trade." Earlier this week, Trump was leading in the prediction markets, with Bitcoin just $234 away from its historical peak of $73,798 in March.
Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, wrote in a report that Trump's "stagnation ahead of the election and potential risk reduction" could be reasons for Bitcoin retesting the $70,000 level.
Trump has previously stated his vision of making the U.S. the cryptocurrency capital of the world, while Harris has cautiously committed to supporting a regulatory framework for the industry. These positions starkly contrast with the industry's crackdown during Biden's term.
Accompanying Bitcoin's latest volatility, U.S. stocks also experienced a sharp decline. The market is cautious ahead of the election vote and next week's Federal Reserve meeting. Fed officials are expected to cut rates again at the meeting and provide clues about the policy outlook.
There is controversy surrounding prediction markets due to disputes over the value of information and potential manipulability. Polls indicate that competition will be fierce as Election Day approaches on November 5.
Ed Yardeni of Yardeni Research Inc. wrote in a report, "While Bitcoin may drop if Harris wins the election, the reaction of Bitcoin to Trump's election as president is harder to gauge. Bitcoin could continue to rise, or considering the gains so far this year, we may see a typical 'buy the rumor, sell the news' situation."