- Bitcoin isn’t as much of a “Trump trade” as it used to be, according to Lekker Capital’s founder.
- Election uncertainty denies investors the opportunity to front-runner potential benefits that crypto could accrue from another Trump term.
- Quinn Thompson says other factors are bigger cryptocurrency price drivers than the US election.
For a while, Bitcoin’s price action and former US President Donald Trump’s political fortunes ran together – but not so much anymore.
So says Quinn Thompson, founder of Lekker Capital, a hedge fund that specializes in using macroeconomic data to trade crypto assets.
“Bitcoin was more obviously a Trump trade when Trump had this 60-40 lead against it [President] Biden in the polls,” Thompson said DL News.
“It was like, Bitcoin will be fine because he’s going to win,” Thompson added.
That changed, Thompson said, when Biden dropped out of the race and Vice President Kamala Harris became the Democratic Party nominee.
Trump and Harris are now neck-and-neck in most polls, with punters at Polymarket giving them equal odds to win the presidency in November.
The uncertainty surrounding the election has forced investors to stop taking a crypto-friendly administration for granted, Thompson said.
In other words, even if Trump continues to do away with the crypto industry right up until November 5th — Election Day — investors can’t really ride the potential changes with the same peace of mind that they would if Trump still clearly won .
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“This ambiguity causes people to weigh other factors that affect Bitcoin’s price, such as growth, recession concerns, the Federal Reserve and liquidity in the system,” Thompson said.
Trump and Harris
Historically crypto-agnostic, Trump threw his support behind the crypto industry in early May.
Among other things, he has promised to free Silk Road creator Ross Ulbricht, met with Bitcoin mining executives and spoke at the year’s biggest crypto event in Nashville, Tennessee.
The Biden administration, meanwhile, has largely given crypto the cold shoulder.
For example, it recently vetoed a proposal to repeal SAB 121, a controversial crypto-accounting rule, despite bi-partisan support for the repeal.
The Harris campaign, for its part, has said it wants to “reset” relations with the crypto industry. But so far she has not taken a public position on the matter.
Tom Carreras writes about markets for DL ​​News. Got a tip on Bitcoin, Trump and the election? Grab at tcarreras@dlnews.com.