Trump's Election Odds Are Unrelated to Bitcoin's Price: Data Reveals the TruthWhile whispers abound about a strong positive correlation between Bitcoin's (BTC) recent price performance and the odds of Republican candidate Donald Trump winning the US presidency, market data reveals the truth: there's no clear connection between the two.Since Trump met with Bitcoin miners in mid-June, crypto market experts have linked the Republican candidate's odds in betting markets to the price of Bitcoin
Trump's Election Odds Are Unrelated to Bitcoin's Price: Data Reveals the Truth
While whispers abound about a strong positive correlation between Bitcoin's (BTC) recent price performance and the odds of Republican candidate Donald Trump winning the US presidency, market data reveals the truth: there's no clear connection between the two.
Since Trump met with Bitcoin miners in mid-June, crypto market experts have linked the Republican candidate's odds in betting markets to the price of Bitcoin. This narrative intensified when Trump dodged an assassination attempt in July, and when Democratic candidate Kamala Harris gained momentum in betting markets, causing Bitcoin to come under pressure earlier this month.
However, an analysis by leading brokerage firm FalconX, comparing BTC price three-day changes and Polymarket odds for Trump winning the presidency, both from June 1 to August 15, shows a lack of clear trend or significant correlation between the two variables.
Charts show no clear relationship between changes in Republican chances and changes in BTC price.
The X-axis shows the percentage increase or decrease in BTC price over a three-day period from June 1 to August 15. The Y-axis represents the increase/decrease in the probability of a Republican victory. Data is sampled every 12 hours. Red dots represent the period from June 29 to July 29 when Trump's chances of winning the presidency spiked on Polymarket. Blue dots represent the so-called Democratic momentum period. Gray dots represent the rest of the time from June 1 to August 15.
The red dots exhibit a scattered pattern indicating no connection between changes in Republican chances and changes in BTC price. The blue and gray dots show similar patterns.
"Interestingly, there is no clear relationship between election odds and BTC price over the entire analysis period from June 1 to August 15, 2024. One reason for these weaker-than-expected relationships could be the many headwinds affecting price, such as the direction of monetary policy in the US, concerns of an impending supply overhang, and other factors we've highlighted previously," David Lawant, Head of Research at FalconX, said in an email to CoinDesk.
Several headwinds, including reports of a mass sell-off in Saxony, Germany, and concerns about large supply from creditors of the now-defunct exchange Mt.Gox, have capped BTC's upside since June, obscuring changes in Republican chances.
However, with Harris now focusing on crypto, the upcoming election could become a major driver for BTC price.
"Of course, a lot can still change before November 5th. It will be very interesting to see whether prediction market data will reveal election news as a key driver, or even the dominant force, of price movements as we get closer to Election Day," Lawant noted.
Conclusion
Despite speculation about a link between Trump's odds of winning and Bitcoin's price movement, data analysis reveals a lack of clear connection. Other factors, such as US monetary policy, supply overhang concerns, and other market forces, may have a greater impact on Bitcoin's price.
As Election Day approaches, it will be interesting to see if prediction market data becomes a determining factor in Bitcoin's price movement.
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