Bitcoin’s Price Action Reflects Trump’s Increasing Election Odds

Analysts are now convinced there is a correlation between Bitcoin’s movements and Trump’s election odds. Other experts believe Bitcoin will thrive regardless of who wins the election. Meanwhile, Tesla still holds $780 million worth of Bitcoin despite recent wallet movements that caused fears of a potential market dump. SEC Chair Gary Gensler is still firm on his “regulation by enforcement” method, and also wished Bitcoin a “sweet sixteen” for its upcoming white paper anniversary on Oct. 31.

Bitcoin’s Surge Connected to Trump Election Momentum

Bitcoin’s price movements have shown a very clear link to the sentiment around Donald Trump’s chances in the upcoming US presidential election, according to recent analysis. Analysts at Bitfinex reported on Oct. 21 that market speculation increasingly suggested a correlation between Bitcoin’s price action and Trump’s election odds. 

Meanwhile, data from the crypto exchange Deribit revealed a concentration of Bitcoin call options that are set to expire at the end of November, around the $80,000 mark, which also proves the market’s anticipation of potential volatility tied to the election outcome.

Bitcoin price and Trump vs Harris election odds (Source: Bitfinex)

David Lawant, head of research at FalconX, shared a contrasting view in a Bloomberg interview on Oct. 22. He stated that Bitcoin is likely to perform well regardless of who wins the election. Despite this, prediction markets like Kalshi and Polymarket have seen Trump’s victory odds rise to about 60%, which suggests that the market is pricing in the uncertainties associated with the election. Analysts also believe that Bitcoin’s recent surge to over $69,000 on Oct. 21 could have been fueled by Trump’s growing chances of winning.

While Bitcoin was trading around the $68,000 price point, almost 90+% of its circulating supply was in profit as many coins were bought close to the $55,000 price level, according to crypto analyst Axel Adler. Traders are also paying very close attention to Trump’s public statements about potential reforms in the US Securities and Exchange Commission (SEC) and broader regulatory changes that could impact the crypto sector, including tax policies affecting digital assets.

The connection between Bitcoin’s performance and the Republican candidate’s odds has been a lot more consistent than other markets, like equities, where investor flows have been less predictable. This relationship even intensified after Trump recently launched the World Liberty Financial (WLFI) token on Oct. 16. The token’s debut fell short of expectations, and only raised about $12.7 million in its first day while leaving $287 million worth of tokens unsold.

Tesla Still Holds $780M in Bitcoin

Tesla might also be very aware of Bitcoin’s potential for a price jump as the electric car manufacturer still holds its entire Bitcoin stash that is valued at close to $780 million, despite transferring all the funds to unidentified wallets on Oct. 15. In an Oct. 22 X post, Arkham Intelligence suggested that the recent wallet movements involved wallet rotations rather than a sale, as Tesla retained ownership of the Bitcoin. The 11,509 Bitcoin were divided across seven wallets, each holding between 1,100 and 2,200 BTC. The largest amounts were transferred to wallets with addresses “1Fnhp” and “1LERL,” respectively.

At first, the transfers caused people to fear a potential market dump, and many shared their concern on social media. However, no other Bitcoin movements happened from these wallets since Oct. 15, according to Arkham’s data. Despite the large transfer, Bitcoin’s price remained stable, and even saw a 5% rise to $69,220 by Oct. 21 before a slight pullback.

Bitcoin 7d price chart (Source: CoinMarketCap)

While the reasons for Tesla’s transfers were not revealed, there has been some speculation that the funds could be moving to a custodian, which could make it possible for the company to secure a loan against the Bitcoin. Tesla currently uses Coinbase Prime Custody for storing its Bitcoin holdings. The company could also reveal more details about its Bitcoin strategy during its third-quarter earnings call on Oct. 23.

If Arkham’s analysis is accurate, Tesla is still the fourth-largest corporate Bitcoin holder, following MicroStrategy, Marathon Digital, and Riot Platforms. Meanwhile, Elon Musk’s other company, SpaceX, holds 8,285 Bitcoin, which is valued at around $560 million, making it the seventh-largest private Bitcoin holder. 

Tesla first entered the Bitcoin market in February of 2021 with a $1.5 billion purchase and briefly accepted Bitcoin as payment for its vehicles in March of 2021, The company ended up revising its decision not long after.

Gensler Wishes Bitcoin a Happy Sweet 16th

Gary Gensler, chair of the US SEC, is still confusing people with his mixed messages about   cryptocurrencies since taking over the regulator in 2021. In an Oct. 22 interview on Bloomberg Business, Gensler sidestepped a question on regulating digital assets by wishing Bitcoin a “sweet sixteen” in honor of the upcoming anniversary of the crypto’s white paper release on Oct. 31. He also shared in the interview that the SEC will continue its current approach to protect investors by using “regulation by enforcement” as a guiding principle.

Gensler also pointed out how important existing regulations are, and stated that the country benefited from almost nine decades of laws and rules that are aimed at promoting markets, protecting investors, and facilitating capital formation. He revealed that this regulatory framework will continue to shape the SEC’s actions. 

When he was asked about how he will respond if Donald Trump wins the 2024 election, especially considering Trump promised to fire Gensler, he declined to comment. He also decided not to comment on Trump’s World Liberty Financial initiative.

The interview took place shortly after the SEC’s Division of Examinations announced that it will prioritize crypto assets for 2025. Gensler’s approach to the cryptocurrency industry has been met with a lot of criticism from some business leaders and lawmakers, but he is in no rush to change the commission’s stance.

Oct. 31 marks the release of the original white paper by the pseudonymous Satoshi Nakamoto, and the first Bitcoin transaction happened on Jan. 3 of 2009, which is now celebrated as Genesis Block Day. 

Safety Fears for Peter Todd

Peter Todd, a Canadian cryptographer and computer scientist, claims that he had to go into hiding because of safety concerns after being portrayed as the inventor of Bitcoin, Satoshi Nakamoto, in an HBO documentary. The documentary aired on Oct. 9, and its main goal was to solve the mystery of Nakamoto’s identity. It ended with Todd saying, “Well yeah, I’m Satoshi Nakamoto,” though he later dismissed this as a joke.

Todd has consistently denied being Satoshi and criticized the film’s director, Cullen Hoback, for using questionable evidence to support the claim. According to Todd, he wanted to be a part of the documentary under the impression that it will focus on the history of Bitcoin rather than trying to unmask Nakamoto. He is also very concerned over the dangers of being wrongly identified as Nakamoto, especially due to potential threats like robbery or kidnapping.

The documentary specifically referenced Todd’s past jokes about being Satoshi, and even compared them to the “I am Spartacus” moment in the 1960 film where characters falsely claim to be Spartacus as an act of solidarity. Despite Hoback’s insistence that identifying Nakamoto is important due to the vast Bitcoin wealth potentially controlled by the anonymous figure, the crypto community is still largely unconvinced by the documentary’s claims.