Trump's Election Odds Are Not The Dominant Driver of Bitcoin's Price, Data Show

Many crosscurrents influencing prices, such as U.S. monetary policy expectations and supply overhangs, might be responsible for the weak correlation between election odds and BTC prices.

Despite popular belief, the likelihood of Republican candidate Donald Trump winning the upcoming U.S. presidential election does not appear to be the primary factor driving bitcoin's (BTC) recent price movements, according to data from prime broker FalconX.

While the narrative suggests a strong positive link between the two, with crypto market experts closely following Trump's performance on betting markets like Polymarket, the analysis shows a lack of clear correlation.

The X-axis shows the three-day percentage increase or decrease in BTC's price between June 1 and Aug. 15. The Y-axis represents the increase/decrease in the odds of a Republican victory. Data has been sampled every 12 hours.

The red dots represent the period between June 29 and July 29 when Trump's probability of entering the White House surged on Polymarket. The blue dots represent the so-called Democrat momentum period. The grey dots represent the rest of the period between June 1 and Aug. 15.

The red dots show a scattered pattern, implying no connection between shifts in Republican odds and changes in BTC's price. The blue and grey dots show a similar pattern.

“Interestingly, there has not been a noticeable relationship between election odds and BTC prices throughout the entire analysis period from June 1 to August 15, 2024. One reason for these weaker-than-expected relationships could be the many crosscurrents influencing prices, such as the path of monetary policy in the U.S., concerns around upcoming supply overhangs, and others, as we highlighted before," David Lawant, head of research at FalconX, told CoinDesk in an email.

Some of the crosscurrents, such as aggressive selling by the German state of Saxony and fears of supply deluge from defunct exchange Mt. Gox's creditors, have reportedly capped the upside in BTC since June, rendering shifts in the Republican odds less impactful.

However, the analysis was conducted before Harris, a crypto skeptic, began to close in on Biden in betting markets. As a result, the election could still emerge as a major driver of BTC prices.

“Of course, a lot can change before November 5. As we approach election day, it’ll be interesting to see if prediction market data reveals election news as a key driver—or even the dominant force—behind price action," Lawant added.

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

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