Data Shows Trump’s Election Odds Aren’t the Factor Behind Bitcoin BTC’s Growth

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Bitcoin has seen many price functions over the past few weeks, with prices briefly hitting a multi-month low in early August before a mild recovery. 

Some pointed at changes in Trump’s election odds as the primary culprit, but recent data shows that’s not the case. A comparison of the changes in Bitcoin prices and Trump’s election-winning odds between June 1 and August 15 shows no definite correlation. 

Instead, some macroeconomic concerns and fears of potential BTC supply overhangs seem to be the dominant drivers.

Trump’s Election Winning Odds Show No Correlation with Bitcoin’s Volatility

Following Trump’s meeting with bitcoin miners in mid-June, crypto market analysts have associated his winning odds on betting marketplaces with the price of BTC. 

Notably, Trump’s chances of becoming the next US president increased on Polymarket and other platforms due to his pro-crypto declarations during this meeting. The odds soared even higher following his assassination attempt in mid-July and his speech at the BTC 2024 conference in Nashville. 

Following these events, Bitcoin prices ticked up, steadying above $65,000, nearing $69,000 on July 29 after the Bitcoin conference. 

However, early this month, Democrat presidential candidate Kamala Harris’ election odds on Polymarket overtook Trump’s. Amid this development, Bitcoin prices faced significant pressure.

Due to these coinciding changes, market analysts believed a positive correlation exists between Trump’s election odds and Bitcoin’s price performance. 

While popular narratives indicate a strong positive correction between both variables, market data paint a different picture. 

A report by crypto prime brokerage firm FalconX’s head of research, David Lawant, contrasts this narrative. According to the report, FalconX analysts compared the three-day change in Trump’s winning odds on Polymarket and the three-day change in Bitcoin’s price from June 1 to August 15. 

After analyzing the changes in both variables, they found no definitive or clear correlation exists between Trump’s election odds and Bitcoin prices. 

Comparison Between Changes in Trump Election Odds Vs. BTC Price Changes

The chart above compares changes in Trump’s winning odds and Bitcoin price movements over the analysis period. FalconX’s analysts sampled the data every 12 hours.

The X-coordinate represents the three-day BTC price change from June 1 to August 15. The Y-coordinate represents the change in the odds of Donald Trump winning the 2024 elections. 

The red dots show the period from June 29 to July 29 when Trump’s odds of becoming the next president surged on Polymarket. 

The blue dots represent periods when the Democrat presidential candidate’s winning odds gained momentum. On the other hand, the grey dots represent other periods between June 1 and August 15.

Analysis Result

According to the analysis, there has been no notable relationship between Bitcoin prices and election odds from June 1 to August 15.  

The report highlighted that a strong correlation between Trump’s win odds and Bitcoin prices should produce an upward-sloping line with a 45-degree angle. Conversely, a strong correlation between Kamala Harris’s win odds and Bitcoin prices would produce a downward-sloping line with a 45-degree angle. 

However, none of these results were obtained. Instead, the analysis showed a fuzzy cloud of dots. 

Major Drivers of Bitcoin’s Price

FalconX’s David Lawant attributed these weaker-than-expected correlations to other major factors influencing Bitcoin prices. These factors include concerns of potential Bitcoin supply overhangs, US monetary policy expectations, and more. 

The US inflation, the Fed’s rate cut expectations, and Germany’s aggressive Bitcoin selloff have influenced Bitcoin prices. Also, fears of a potential increase in BTC supply due to Mt. Gox creditors’ repayment have limited Bitcoin’s price moves. 

According to the FalconX report, these crosscurrents have overshadowed the shifts in Donald Trump’s win odds. However, with Harris shifting towards a pro-crypto stance, the upcoming election could significantly influence Bitcoin prices. 

Lawant noted that a lot can change before the election day in November. Seeing the election news become the key driver behind Bitcoin price performance will be interesting.