Bitcoin (BTC) has rallied above $62,000, surpassing its crucial 200-day simple moving average (SMA), as the probability of Donald Trump winning the 2024 U.S. presidential election has increased following an attempted assassination of the former president over the weekend.
The leading cryptocurrency by market value has seen a 7% surge since the attack, which has boosted Trump's probability of winning the elections to 70% on Polymarket. Trump-themed Polifi tokens, which mark the intersection of politics and finance, have also surged in the aftermath.
In recent months, Trump has embraced crypto to outflank his rival, Joe Biden, and win over the crypto community, which is seeking a friendlier regulatory environment for the industry. As such, bitcoin and the broader crypto market have become bets on Trump's victory. The former president is committed to speaking at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27.
"The biggest fundamental news over the weekend was the Trump assassination attempt. Absolutely insane. This has improved the odds of a Trump presidency. Trump being the pro-crypto president should help galvanize the cryptocurrency bids," Greg Magadini, director of derivatives at Amberdata, said in an email.
The Chinese yuan (CNY) traded lower against the U.S. dollar as a potential Trump victory could mean higher trade tariffs. Early this year, Trump suggested revoking China's "most favored nation" status for U.S. trade and imposing tariffs of more than 60% on Chinese goods. The Mexican peso (MXN) also slipped due to Trump's terse relations with the Latin American nation during his previous Presidential reign.
Prices for futures tied to the 10-year Treasury note fell, hinting at higher yields as Trump's return to the White House would mean more spending, tax cuts, and higher budget deficits. Several investment banks are betting that a potential Trump victory would steepen the presently inverted yield curve in the coming months. Historically, sharp steepening has led to broad-based risk aversion in financial markets.
Futures tied to the S&P 500 traded 0.18% higher as of writing, signaling a positive open on Monday even as Asian stocks dipped on the back of disappointing economic growth figures in China. The dollar index, which tracked the greenback's value against major fiat currencies, traded 0.10% higher at 104.19, according to TradingView.
The attempted assassination of Donald Trump has sent shockwaves through the financial markets, with bitcoin and other assets linked to the former president's probability of winning the 2024 elections seeing a surge in volatility. As the crypto community looks to a potential Trump presidency for a more favorable regulatory environment, the markets will continue to closely monitor the developments in the 2024 U.S. presidential race.
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