A Crypto Investor’s Guide to Election Day
Trump Maintains a Slight Edge, But It’s Essentially a Tossup
Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States.
As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations.
Odds for both candidates have oscillated around the 50% threshold since the race restarted back in July, with both experiencing periods of optimism within their respective bases. However, neither has been able to conclusively pull away from their opponent. Thus, we enter election day with Trump maintaining a slight edge, but in a probabilistic sense it remains a tossup.
The Destination Remains Unchanged
Today, I want to once again state our higher-level views as they pertain to the election and then discuss how we expect the market to react post-election.
First, regardless of the outcome of the presidential election, the current electoral math makes it extremely likely that the Senate flips Republican. In our view, this is unequivocally good for the crypto industry, as Senate leadership (Brown, Warren) has been outwardly hostile toward the industry. They are...Reports you may have missed
INDICATIONS OF FROTH Given the violent nature of the past month’s rally, we have been vigilant for signs of a local top. It would be disingenuous to claim that some qualitative "top signals" are not flashing right now. XRP—which we noted as a possible election trade back in October—with only 1–2k daily active addresses (vs ETH's over 400k, source: Artemis), is ripping toward new highs while influencers take to TikTok...
TURNING CAUTIOUSLY OPTIMISTIC There is a lot of pain in the ETHBTC chart. It peaked in December 2021 and, save for several brief rallies, has been on a downwards slope ever since. It peaked at just under 0.09 and currently trades around 0.038. Source: TradingView Fortunately, we have anchored most of our attention on BTC and SOL this cycle, as BTC has continued to lead the market in a generally...
BTC DECOUPLING FROM EQUITIES Over the past two weeks, BTC has begun to decouple from other risk assets. While the broader macro environment experienced choppy conditions from November 12th through yesterday, BTC has appeared indifferent to fluctuations in risk appetite, continuing its upward momentum and approaching the $100K milestone. A chart of BTC correlations highlights this decoupling, with sharp declines in its correlation to the QQQ, SPX, and IWM. The...
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
