Crypto Market Takes a Dip Amidst US Election Uncertainty
Crypto markets took a tumble on Wednesday, mirroring the slump in US equity prices and the swirling speculation around the presidential election race.
Bitcoin (BTC) took a dive, dropping from $65,000 to $63,500 in just two hours during the mid-morning trading hours in the US. Over the past 24 hours, BTC is down 1.7%.
The second-largest cryptocurrency, Ethereum (ETH), and Solana’s native token (SOL) held up a bit better, but still experienced declines of over 1%. Smaller digital assets saw even bigger losses, pushing the broad-market benchmark Coindesk 20 Index (CD20) down by 2.8%.
Leading the decline were Ripple’s XRP (XRP), Polkadot’s DOT (DOT), Cardano’s (ADA), and Polygon’s MATIC, all dropping by 5%-6%.
The price action coincides with the continued struggles of US equities, with the tech-focused Nasdaq 100 falling another 1% and the broad-based S&P 500 dropping 0.7%.
Uncertainty about the US presidential election has spiked in recent hours with reports of growing pressure from top party figures for President Biden not to seek re-election.
Traders on the crypto-based prediction market Polymarket now give an 80% chance of Biden dropping out, up from 40% a day earlier.
Meanwhile, the odds for Vice President Kamala Harris becoming the Democratic nominee for the presidential race have jumped to 63% from 15% a day ago.
At the same time, GOP nominee Donald Trump’s chances of winning have slightly decreased on Polymarket to 65%, down from a 70% high after surviving an assassination attempt last weekend.
The rebound in crypto prices over the past week was partly driven by investors seeing increased chances for Trump winning the election, which could bring a more crypto-friendly administration to the US.
