Bitcoin (BTC) Reclaims 200-Day Average as ‘Trump Trades’ Come Back into Fashion After Weekend Attack

Assets linked to the probability of US Republican candidate Donald Trump winning the November 4 election are experiencing renewed volatility following an assassination attempt on the former president on Saturday.

Bitcoin (BTC) has gained 7% to $62,500 since the weekend attack, increasing the pro-crypto candidate’s probability of winning the election to 70% on Polymarket.

The leading cryptocurrency by market cap has broken above the crucial 200-day simple moving average (SMA), a widely followed indicator of long-term trends and a trendline characterizing the downtrend from early June highs, which is a positive sign for momentum traders, according to CoinDesk data. Trump-themed Polifi tokens, marking the intersection of politics and finance, also surged.

In recent months, Trump has shifted gears and embraced crypto to get ahead of his rival, Joe Biden, and win over the supposedly single-issue crypto community that is seeking a more favorable regulatory environment for the industry. As a result, bitcoin and the broader crypto market have become bets on Trump’s victory. The former president has committed to speaking at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27.

“The biggest fundamental news of the weekend was the attempted assassination of Trump. This is completely crazy. It has improved the odds of a Trump presidency. The fact that Trump is the pro-crypto president should help galvanize cryptocurrency offerings,” Greg Magadini, director of derivatives at Amberdata, said in an email.

Elsewhere, the Chinese yuan (CNY) declined against the US dollar as a possible Trump victory could lead to higher tariffs. Earlier this year, Trump suggested revoking China’s “most favored nation” status for trade with the US and imposing tariffs of more than 60% on Chinese goods. The Mexican peso (MXN) also fell due to Trump’s strained relations with the Latin American nation during his previous presidential reign.

Futures on 10-year Treasury bonds fell, suggesting higher yields as Trump’s return to the White House means more spending, tax cuts and larger budget deficits. Several investment banks are betting that a Trump victory would steepen the currently inverted yield curve in the months ahead. Historically, a steepening curve has led to widespread risk aversion in financial markets.

Futures contracts tied to the S&P 500 were up 0.18% at the time of writing, indicating a positive opening on Monday, even as Asian stocks fell on disappointing economic growth figures from China. The dollar index, which tracks the greenback’s value against major fiat currencies, was up 0.10% at 104.19, according to TradingView.