As the US presidential election approaches its conclusion, altcoins have become a focal point for traders, who anticipate a significant market impact based on the outcome, according to a Bloomberg News report.
The report noted that while Bitcoin (BTC) holds steady at around $70,000 — roughly 5% below its all-time high — altcoins like Dogecoin (DOGE) and Solana (SOL) are seeing increased volatility as speculation grows about potential shifts in US crypto policy.
In a notable move, Dogecoin surged 18% after Elon Musk hinted at a hypothetical “Department of Government Efficiency” (D.O.G.E.) if former President Donald Trump is victorious. The token, now trading at approximately 17 cents, has doubled in value since the start of the year.
Bitcoin safe, altcoins threatened
Zaheer Ebtikar, the founder of Split Capital, said Bitcoin would thrive in this bull cycle regardless of who wins the elections. However, Vice President Kamala Harris’ win might create a landscape where altcoins struggle due to heightened regulatory scrutiny.
Historically, altcoins tend to surge during bull markets, with investors often moving into these smaller-cap assets after Bitcoin rallies. However, this past year has been challenging for altcoins, which have generally underperformed compared to Bitcoin, with a few exceptions among high-risk “memecoins” like Dogecoin.
A Galaxy Research “policy scorecard” contemplating the US presidential candidates’ stances also highlighted that Harris’ term might pose a risk to altcoins. Meanwhile, Galaxy analysts expect an “explosive upside” for the entire market if Trump wins.
Vetle Lunde, head of research at K33 Research, stated that a Harris win will likely drive prices down initially, but the dump may be short-lived. Lunde added that broader macro factors and decreased election uncertainty will likely support a year-end rally.
Options on Deribit, the largest crypto options exchange, indicate a split view among traders, with increased interest in protective puts and bullish calls. This suggests that while some are hedging against potential regulatory challenges under a Harris administration, others are banking on a market lift if Trump wins.
Bitcoin Market Data
At the time of press 7:27 pm UTC on Nov. 5, 2024, Bitcoin is ranked #1 by market cap and the price is up 2.9% over the past 24 hours. Bitcoin has a market capitalization of $1.38 trillion with a 24-hour trading volume of $45.1 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 7:27 pm UTC on Nov. 5, 2024, the total crypto market is valued at at $2.32 trillion with a 24-hour volume of $91.09 billion. Bitcoin dominance is currently at 59.47%. Learn more about the crypto market ›