Crypto Market Idles in Likely Calm Before Election Day, FOMC Storm

• Crypto assets are trading flat.
• Crypto traders appear to be erring on the side of caution ahead of a likely consequential week for the market.
• Despite fears of short-term volatility, many expect the market’s long-term trajectory to remain intact.

Over the past few months, the U.S. presidential election has arguably been the most discussed issue globally, save perhaps for the Israel-Palestine conflict—and for good reason, as it looks set to be one of the nation’s most divisive and consequential polls yet.

In crypto, in particular, several leaders have sought to frame the election as a choice between continued innovation and a slow and painful death through regulation. With Election Day now merely hours away, the tension in the market is palpable—a situation further compounded by the anticipated Federal Open Market Committee (FOMC) November 2024 meeting.

Bitcoin, Ethereum, Solana Trade Flat

Crypto assets are trading flat ahead of the election on November 5 and the FOMC meetings scheduled for November 6 and November 7.

At the time of writing, Bitcoin (BTC) , the largest crypto asset by market capitalization, is trading just below the $69,000 price point, representing a less than 1% change in the past 24 hours. The muted price action marks a stark contrast to the price rally that saw the asset flirt with its all-time high near $74,000 last week.

Similarly, fellow market leaders, Ethereum (ETH) and Solana (SOL) , are also trading flat with negligible gains of 0.62% and 0.03%, respectively, in the past 24 hours.

The muted price action suggests that investors and traders are erring on the side of caution as they anticipate wild market volatility in the fallout from this week’s events.

Despite fears of short-term volatility and the din and rhetoric surrounding the election, many expect the market’s long-term trajectory to remain intact at least for Bitcoin.

A Nothingburger in the Long-Term?

Ahead of the election, several analysts have stressed that they still expect Bitcoin to continue its upward momentum and eventually clinch the $100,000 price point. One such analyst is Bitwise CIO Matt Hougan.

"I think the most important thing for Bitcoin is that the election happens. Regardless of a Trump win or a Harris win, the regulatory setting for bitcoin is improving, and I think that's what you're seeing reflected in the price,” Hougan told Yahoo Finance at the end of October 2024 as he expressed confidence that the asset's price was set to go beyond $100,000.

However, Hougan argued that the situation was more nuanced for altcoins, citing greater regulatory uncertainty.

“Those [altcoins] are more exposed to regulatory risks, so I would expect an altcoin rally, even more so than a Bitcoin rally in the event of a Trump win. But regardless, I think both are moving higher,” he asserted.

At the time of writing, Polymarket odds show a 58.7% chance of former President Donald Trump winning the election compared to a 41.3% chance for Vice President Kamala Harris . At the same time, the CME FedWatch Tool predicts a 99.8% chance of the Federal Reserve deciding on a 0.25% rate cut in the FOMC meeting.

On the Flipside

• The anticipated market volatility is expected to be short-lived.
• Bitcoin has historically experienced significant rallies following elections.

Why This Matters 

The recent market price action highlights the perceived consequential nature of the election and the FOMC meeting for the crypto market.

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