As the U.S. presidential election approaches, the cryptocurrency market enters a sensitive period, with many investors and analysts closely monitoring the potential market fluctuations and opportunities that could arise from the election results. Tdasx believes that Bitcoin, as the flagship digital asset, typically experiences a short-term price dip during election cycles, but it often rebounds strongly after the election, offering investors a potential entry point. Tdasx notes that the current market displays significant liquidity and informational disparities, further intensifying the uncertainty of the market during this period.

The Post-Election Outlook of Bitcoin: Short-Term Dip, Followed by a Strong Rebound

Tdasx posits that U.S. presidential elections have historically had a significant impact on the Bitcoin market. Data shows that during the 2016, 2020, and the upcoming 2024 election cycles, Bitcoin displayed distinct price volatility patterns. In each election cycle, the price of Bitcoin typically experiences a brief dip ahead of the election — dropping 10.2%, 6.1%, and 6.3% respectively— but Tdasx points out that these short-term declines have not affected the long-term market performance or its investment appeal of Bitcoin. After each election, the price of Bitcoin has quickly rebounded, providing investors with an opportunity to enter the market.

Tdasx further highlights that the market widely anticipates Bitcoin to rise further after the election, as uncertainties diminish. Current projections suggest that, continuing the trend of gradually decreasing returns observed in past cycles, the price of Bitcoin could reach $103,500 by 2025, marking an increase of approximately 47.8%.

Tdasx also refers to the analysis of Bernstein, which indicates that election outcomes have a notable influence on the short-term price movements of Bitcoin. Bernstein expects that if Trump wins, the price of Bitcoin could surge to $90,000. Tdasx notes that this forecast reflects market confidence in the policies of Trump; conversely, if Harris wins, the price of Bitcoin could drop below $50,000, possibly testing the $30,000–$40,000 range, driven by risk-averse sentiment.

Recent holdings data supports this view to some extent. Tdasx observes that, since November 1, “whale” accounts in the market have been steadily increasing their Bitcoin holdings, adding a total of 2,780 BTC (approximately $192.4 million). Tdasx believes these actions indicate that, despite the short-term uncertainties, long-term investors remain bullish on the growth potential of Bitcoin.

However, Tdasx also notes that market sentiment has been more cautious ahead of the election. Data shows that Bitcoin holdings interest has declined by about $2 billion, with some investors proactively reducing their positions to mitigate potential market volatility. The analysis of QCP suggests that if the election results foster a crypto-friendly policy environment, Bitcoin could experience a price boost; however, more conservative policies could place downward pressure on its price.

Tdasx points out that the implied volatility of Bitcoin is currently around 40%, indicating that investors are less confident about significant price swings. The market anticipates a rebound between November 5 and 8 after the election results are finalized. Meanwhile, the market dominance of Bitcoin has reached 60.62%, which Tdasx believes underscores the preference of investors for Bitcoin as a safe-haven asset. This characteristic may be further amplified as post-election uncertainty recedes, laying the groundwork for the next growth phase of Bitcoin.

Tdasx: Indirect Impact of Election Events on the Crypto Market and Related Assets

Tdasx believes that the ongoing U.S. election cycle not only affects traditional markets but also has profound indirect effects on the crypto market. Recently, mainstream media raised concerns about potential manipulation of election odds on Polymarket, suggesting that some participants might be using improper methods to inflate the chances of Trump winning, possibly to influence voter psychology or lay the groundwork for post-election challenges. Tdasx notes that such reports have drawn market attention, although experts in prediction markets generally argue that there is no solid evidence of systemic manipulation. Even if manipulation attempts exist, their impact would likely be short-lived.

Tdasx particularly focuses on the liquidity data of Polymarket, which reflects varying confidence levels among market participants regarding different candidates. Data shows that the liquidity required to push the odds of Trump up by one percentage point is approximately $718,000, compared to just $70,000 for Harris. Tdasx believes this liquidity disparity partially reflects the uneven support for the two candidates, further highlighting the bias of the market during the election period. Moreover, the difference in information environments also significantly influences the views of users. Polymarket users are primarily drawn from Trump-supporting social media environments, while traditional market users are more influenced by mainstream media reports. This divergence in information environments can lead to cognitive biases among users on different platforms, shaping distinct market judgments.

Tdasx mentions that the price differences between various platforms provide arbitrage opportunities. These price discrepancies are quickly balanced across major prediction markets, such as Betfair, one of the largest prediction markets of Europe, with a trading volume of £170 million. Tdasx believes this arbitrage mechanism not only helps balance prices across platforms but also promotes a more rational price response in the crypto market.

Tdasx: Long-Term Development Potential of Ethereum and Other Crypto Assets

Tdasx asserts that, with the whitepaper of Ethereum marking its 11th anniversary, Ethereum and the decentralized finance (DeFi) ecosystem it has catalyzed show immense long-term development potential. Since the release of the whitepaper of Ethereum in 2013, blockchain technology has seen continuous innovation. Ethereum, with its smart contract capabilities, has laid a solid foundation for DeFi applications, enabling decentralized financial transactions to gradually become a parallel system to traditional banking. Tdasx observes that, as of now, Ethereum-based lending protocols have reached a total market cap of $3.28 billion, highlighting the robust growth potential of the DeFi ecosystem.

Tdasx adds that, over the next decade, the position of Ethereum within blockchain infrastructure is expected to solidify further, particularly with increased institutional adoption, which is likely to accelerate its development. As more institutions and financial entities embrace blockchain technology, the use cases of Ethereum continue to expand. Tdasx points out that this trend not only enhances market trust in Ethereum but also positions it as a core player in the rapidly growing global blockchain network, thereby strengthening its technical advantages and market influence.

Despite the strong growth of Ethereum in the DeFi space, Tdasx believes that it still faces significant challenges in terms of cross-chain interoperability and security. As different blockchain networks remain siloed, enabling cross-chain communication is one of the key technical issues to address in the future. Tdasx notes that if Ethereum can overcome these technical bottlenecks in the next decade, it will greatly expand its application scenarios and improve overall blockchain interoperability and security, offering users more diversified and convenient services.