Cryptos, stocks, and gold see gains as markets respond positively to increased odds of Trump presidency
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Financial markets saw a positive start to the week as the attempted assassination of former President and current Republican Presidential nominee Donald Trump dominated headlines, overshadowing the return of earnings season, which included reports that Goldman Sachs recorded a profit surge of 150% amid investment banking strength.
“The likelihood of Donald Trump regaining the presidency reached a record high on Saturday, according to data from Polymarket, following an incident at a Pennsylvania rally,” said analysts at Secure Digital Markets. “Traders on the platform now assign a 70% probability to his success in the upcoming November election.”
“While the incident involving Trump, the Republican presidential candidate, has the potential to heighten political tensions in the U.S., investors speculated it could boost Trump's and the Republican Party's standing in the polls ahead of the November election,” they said. “Additionally, investors are focusing on the upcoming second-quarter earnings reports, which could serve as a new catalyst for a market that has reached record highs this year.”
Monday’s earnings reports provided an additional boost to stocks as the report from Goldman Sachs improved sentiment, with investors taking the growth in profits as a sign that Wall Street is recovering from a two-year drought.
BlackRock, the world's largest asset manager, reported that their assets under management climbed to a record of $10.6 trillion in the second quarter, which also boosted sentiment. Notably, BlackRock is currently the largest public holder of BTC through its iShares Bitcoin Trust ETF (IBIT), which now holds over 300,000 BTC.
At the closing bell, the S&P, Dow, and Nasdaq all finished in the green, up 0.28%, 0.53%, and 0.40%, respectively.
“The cryptocurrency market experienced a significant rally on Monday, with BTC surging by up to 5% to exceed $63,000,” analysts at Secure Digital Markets said. “This rise comes amidst growing optimism for the digital asset sector under a potential Trump presidency. Since hitting a low on July 5th, BTC has increased by over 17% in just 10 days, returning to positive territory.”
BTC/USD Chart by TradingView
“Although Trump has yet to outline specific plans for cryptocurrency regulation, he is now perceived as a supporter of the sector despite his previous skepticism,” the analysts said. “Trump is scheduled to speak at a major annual Bitcoin conference later this month.”
According to Sam Callahan, senior analyst at Swan Bitcoin, the market currently sees Trump as a more positive influence on prices than Biden.
“More broadly, asset prices seem to be viewing a Trump victory as a favorable outcome due to his policy promises around tax cuts and less regulation,” he said. “When you couple this with the Republican Party's recent pro-Bitcoin policy stance, it's easy to understand why Bitcoin is reacting positively to the increased likelihood of a second Trump presidency.”
“One potential catalyst that I will be keeping a close eye on is Trump's upcoming speech at the Bitcoin Conference,” Callahan said. “If Trump speaks about Bitcoin's potential as a treasury reserve asset, this could be a milestone moment for Bitcoin adoption in the U.S.”
“Trump has consistently been seen as the pro-crypto candidate,” said Pat Doyle, Blockchain Researcher at Amberdata. “The market's response to the recent failed assassination attempt underscores strong investor confidence in Trump's prospects for winning the upcoming election. Polymarket currently places Trump's odds of victory at 71%, indicating significant market support for his candidacy. This positive sentiment is reflected in Bitcoin's price movement.”
“Additionally, a Trump victory would likely result in the replacement of key figures such as SEC Chair Gary Gensler, along with other regulators who have taken a stringent stance against cryptocurrencies,” Doyle noted. “This potential shift in regulatory approach could foster a more favorable environment for the crypto market.”
Another factor at play is the growing chorus of Democrats calling for Biden to step down, which Doyle said would have a significant impact on the crypto market.
“Looking ahead, the primary election-related catalyst that could significantly impact the market is the potential resignation of President Biden,” he said. “Such a development could be perceived positively by crypto investors, anticipating a shift in regulatory dynamics. Other scheduled events, including national conventions and presidential debates, will likely have a more subdued impact on the market.”
While the recent events surrounding Trump have been cited as the reason for the positive move in crypto on Monday, renowned trader Peter Brandt noted that the Bitcoin price action has demonstrated its “often-repeated Hump…Slump…Bump…Dump…Pump chart construction” – meaning the July 5 pullback to $53,500 was really just a bear trap, and Bitcoin has been recovering since then.
At the time of writing, Bitcoin trades at $63,785, an increase of 5.7% on the 24-hour chart.
Sea of green in the altcoin market
It was a breakout day for the altcoin market as all but 5 tokens in the top 200 recorded gains.
Daily cryptocurrency market performance. Source: Coin360
SATS (1000SATS) was the biggest gainer with an increase of 25.4%, followed by an increase of 24.8% for Worldcoin (WLD), and a climb of 22.2% for Mog Coin (MOG). XDC Network led the losers, falling 4.4%, while Zcash (XEC) lost 2.4%, and Stellar (XLM) declined by 2%.
The overall cryptocurrency market cap now stands at $2.33 trillion, and Bitcoin’s dominance rate is 53.7%.
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Jordan Finneseth
Tim Moseley