Choppy waters for crypto ahead of US vote
Dollar and digital assets endure rocky ride as election goes to the wire
It was a turbulent weekend for crypto markets as the US Presidential election approaches its final hours. Bitcoin recently flirted with an all-time high last week, spiking above $73k. Since then, the price has proved highly volatile, dipping to $67,665 on Sunday before rallying again this morning.
There are no prizes for guessing the likely cause of the market’s bumpiness. The outcome of the US election remains impossible to call and could yet come down to a few thousand votes in key swing states.
A Trump victory is widely perceived as more favourable for crypto markets, at least in the short run. However, should the election count show a Harris win, Trump is widely expected to contest the result. This could lead to crypto volatility continuing well after the polls close and – depending on the legal and political rhetoric that follows – potentially extending for weeks to come.
Volatility has not been helped by the upcoming interest rate decision from the US Federal Reserve, with markets expecting a further 25bps cut.
The election and US rate decision are also stirring fiat FX markets, with EUR/USD rallying early in the European session.
Geopolitical uncertainty ratchets up
The outcome of the US election will also have much longer-term impacts on the geopolitical environment, affecting global hotspots from Israel to Ukraine and broader Eastern Europe.
A Trump victory could lead to stronger US support for Israel’s military actions in Gaza and South Lebanon, potentially creating tensions with Europe, where politicians and public opinion are showing greater unease with the actions of the Netanyahu government.
Meanwhile, Trump’s scepticism toward continued support for Ukraine in its defence against Russia’s invasion could prove even more significant for US-European relations and for the tensions in eastern European states. Maia Sandu, the pro-EU president of Moldova, secured a second term in weekend elections, though yet again Sandu’s backers claimed her victory came despite interference from Russia.
Russia issues Google with record fine… no-one cares
Russia meanwhile has also declared economic war on Google, alleging its removal of Russia TV stations from its services is illegal. Russian authorities have fined the group 2 undecillion rubles – a 2 followed by 36 zeroes. This ludicrous sum translates to $20 billion trillion trillion, and thousands of times the size of the entire global economy.
The seriousness with which investors took this grave news was clearly evidenced in the share price of Google’s parent Alphabet… which has risen about 2.45% over the last week.
Brought to you by the BCB Trading Team
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