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Bitcoin is experiencing increased volatility as the U.S. Presidential election draws near, and uncertainty is affecting the market.
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Altcoins such as Ethereum and Solana are struggling to compete with Bitcoin, which has surpassed 60% dominance.
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Florida’s state pension fund is exploring the expansion of its crypto holdings in anticipation of possible federal regulation changes.
Bitcoin’s price is likely to fluctuate significantly in the run-up to the U.S. Presidential election as market uncertainty adds pressure to the cryptocurrency. Altcoins in particular are struggling as Bitcoin continues capturing the majority of capital flows.
Bitcoin investors are bracing themselves for significant market volatility as the U.S. Presidential election nears. After months of sideways movement and an initial “Trump Trade”, Bitcoin briefly reached its all-time highest last week, only to experience a steep correction.
Bitcoin is currently trading at $68,545.40. This is a decrease of 3.4% in the last week. The election result is still uncertain, but markets are leaning towards a Republican victory as being beneficial for Bitcoin.
The implied volatility of Bitcoin options is low in the lead-up to Election Day. This suggests that many investors will wait until the results are confirmed before investing. Analysts believe that a price spike may occur between November 5 to 8 as the market reacts to the election results.
Altcoins Struggle while Bitcoin dominates capital inflows
Altcoins are still facing challenges, as Bitcoin continues to dominate capital inflows. Bitcoin dominance has risen to over 60% – a new cycle high – while altcoins such as Ethereum and Solana are down double digits from their recent highs.
Currently, Ethereum has fallen 7.19% over the last week and Solana has fallen 11.16%. Analysts believe that altcoins will not recover in the short term without new catalysts.
U.S. Economy Steady Heading into Election
Despite recent hurricanes, and labor disruptions in the United States, economic indicators are stable ahead of elections. The unemployment rate remains at 4.1% with wage growth of 4% year-on-year.
Despite a decline in job openings, consumer spending is still strong and has contributed to the 2.8% growth in GDP for the third quarter. The Federal Reserve is also expected to maintain its cautious stance in regards to rate cuts, to support the continued economic expansion.
SEC tightens scrutiny on crypto firms
In related news the SEC has intensified their scrutiny of cryptocurrency companies. Blockchain gaming platform Immutable could face legal action for its IMX token. Immutable announced that it will vigorously defend their position, claiming IMX doesn’t qualify as a securities.
Tether, a stablecoin that has been around since 2011, reported a record-breaking third-quarter profit of $2.5 billion. This was backed by the circulation of USDT worth $120 billion and the strong reserves held in U.S. Treasury bonds.
Florida’s state pension fund also makes headlines. CFO Jimmy Patronis expressed support for expanding the $800 million crypto-assets as a hedge against government control. This move could gain momentum in the event that former President Trump is elected again.
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