The correlation between the recent performance of bitcoin (BTC) and the odds of Republican candidate Donald Trump winning the U.S. presidency by betting markets may not be as straightforward as previously thought. The perception of a strong connection between Trump’s election odds and BTC prices has been a popular narrative among crypto market experts, particularly after Trump’s meeting with bitcoin miners in mid-June and his survival of an assassination attempt in July.

However, a recent analysis by prime broker FalconX challenges this narrative. The comparison of three-day changes in BTC’s price and Republican election odds between June 1 and Aug. 15 showed a lack of definitive correlation between the two variables. Despite the surge in Trump’s probability of entering the White House on Polymarket, there was no clear pattern or relationship between changes in Republican odds and BTC prices during this period.

David Lawant, the head of research at FalconX, highlighted that the absence of a noticeable relationship between election odds and BTC prices could be attributed to various crosscurrents influencing prices. Factors such as monetary policy in the U.S. and concerns about upcoming supply overhangs have potentially overshadowed the impact of shifts in Republican odds on BTC prices. Lawant also emphasized that aggressive selling by The German state of Saxony and fears of a supply deluge from defunct exchange Mt. Gox’s creditors have contributed to capping the upside in BTC since June.

Despite the lack of a clear connection between Trump’s election odds and BTC prices during the analysis period, Lawant acknowledged the possibility of the impending election becoming a dominant driver of BTC prices, especially with Democrat candidate Kamala Harris catching up in betting markets. As the election day approaches, it will be interesting to see if prediction market data eventually reveals election news as a key driver, or even the dominant force, behind BTC price action.

It’s important to note that the analysis conducted by FalconX provides valuable insights into the relationship between Trump’s election odds and BTC prices, offering a more nuanced perspective that challenges the widely accepted narrative. The absence of a definitive correlation between the two variables calls for a more comprehensive understanding of the multiple factors influencing BTC prices, rather than solely relying on the dynamics of the U.S. presidential election bets.

As the cryptocurrency industry continues to evolve, it is crucial to consider a wide range of factors that contribute to the volatility and movement of BTC prices. This analysis serves as a reminder of the complexity of the crypto market and the need to conduct thorough assessments to gain a deeper understanding of price fluctuations and market trends.

In conclusion, it’s evident that the relationship between Trump’s election odds and BTC prices is more intricate than initially perceived. The absence of a clear correlation between the two variables underscores the need for a comprehensive approach to analyzing the factors driving BTC prices, moving beyond singular narratives and considering the multifaceted nature of the cryptocurrency market.

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