Bitcoin has experienced a significant rally, with many market analysts suggesting the cryptocurrency’s rise reflects growing confidence in a Donald Trump victory in the upcoming U.S. presidential election. Investors see Trump, a Republican candidate known for his pro-crypto stance, as a potential catalyst for the digital asset market, boosting the sentiment surrounding Bitcoin.
Over the past week, Bitcoin surged by approximately 13%, outperforming both global stocks and gold. Billionaire investor Stanley Druckenmiller pointed to the cryptocurrency as a key indicator that markets are pricing in a win for the former president. In a recent Bloomberg interview, Druckenmiller stated that the markets appeared “very convinced” of Trump’s chances, emphasizing that “you can see it in the bank stocks, you can see it in crypto.”
Meltem Demirors, a general partner at Crucible Capital, echoed this sentiment, explaining that Bitcoin’s rise has been tied to its emergence as a central issue in the election. “Crypto’s emergence as an election issue is driving a lot of attention to Bitcoin and the broader crypto asset class, and that attention is being translated into sentiment, and sentiment – as we know – leads to flows,” Demirors said during an interview with Bloomberg Television.
Trump’s promise to turn the U.S. into the global hub for cryptocurrencies has resonated with a segment of voters and investors. The former president’s embrace of the sector has led to Bitcoin being seen as a “Trump trade,” a financial wager based on his potential return to the White House.
Since October 11, net inflows into U.S.-based Bitcoin exchange-traded funds (ETFs) have exceeded $1.6 billion. As of October 17, Bitcoin was trading at approximately $67,260, still below its March peak of $73,798 but showing strong momentum.
This Bitcoin rally coincides with shifting dynamics in prediction markets, where users bet on election outcomes. Trump’s odds on the Polymarket platform surged to 58%, while his Democratic opponent, Vice-President Kamala Harris, saw her odds fall to 41%. On PredictIt, Trump is leading with 54%, compared to Harris’s 49%.
Despite the optimism in prediction markets, national polls tell a different story. Harris holds a narrow lead of 1.6 percentage points over Trump in the RealClearPolitics average of national polls. In key battleground states, Trump has a slight edge, leading by less than 1 percentage point.
Harris has taken a more cautious approach to cryptocurrency regulation, advocating for a balanced framework that promotes industry growth while ensuring appropriate safeguards. Her stance represents a shift from the tougher regulatory approach under the Biden administration and has generated a wave of optimism among some crypto traders.
Trump’s newfound support for cryptocurrency marks a notable shift, as he previously criticized the asset class, once referring to it as a “scam.” Nevertheless, digital asset firms have become influential players in this election, contributing significant donations to political action committees as they seek more favorable regulations. With less than three weeks until election day, the role of cryptocurrency in the political landscape is poised to remain a focal point for both investors and voters.