StoneX Digital Asset Weekly Commentary - Presidential Election Rally

By: Stonex Digital LLC, Stonex Digital LLC

Thu, 07 Nov 2024, 16:01

From Polls to Profits: How Trump’s Win Ignited the Bitcoin and Crypto Rally

David Kroger
Senior Vice President
StoneX Digital
david.kroger@stonex.com

Executive Summary

Theme of the week – Election Night Surges, Bitcoin ETF Inflows, and Trump’s Impact on Digital Assets
Sector commentary: Bitcoin and altcoins rise on Election Day, while crypto investment, DeFi, and Web3 projects gain momentum

On election night, as President Donald Trump took a lead with early state wins, betting odds on Polymarket shifted sharply, with substantial funds favoring Trump and driving a rally in Bitcoin and altcoins. Bitcoin surged to a new all-time high of $75,361, according to CoinMarketCap, marking an 8% increase and closely aligning with our Tuesday flash note forecast, which anticipated this based on options pricing.

Bitcoin's trusted spot trading volume reached $41.67 billion, 3.6 times the average daily volume of $11.4 billion since September, with our desk also experiencing the highest trading volumes of the year. This surge reflects the crypto market's unique structure, offering 24/7 trading access that enables investors to respond instantly to market-moving events. Futures open interest has reached an all-time high above $45 billion, yet funding remains healthy at an annualized rate of 10%.

Source: StoneX Digital, CoinMetrics

Polymarket became a focal point for election betting, with odds at the start of the week showing Trump as the frontrunner, his chances reaching as high as 67% and driving $3.7 billion in volume on election-related bets. Polymarket's ability to capture rapid shifts in election odds made it a popular real-time source, contrasting with traditional outlets like The Economist, which showed Harris leading. With over $84 million expected to be paid out, Polymarket’s “Presidential Election Winner 2024” market participants may need to wait until Jan. 20, 2025, for payouts unless major media outlets such as the Associated Press, Fox News, and NBC reach a consensus sooner. If no consensus is reached, payouts will rely on the president inaugurated on Inauguration Day.

image-20241107100504-2

Source: Polymarket

While other bets on Polymarket are nowhere near the volume seen with the election, most of the popular bets in the crypto category relate to market prices reaching all-time highs. Solana has notably outperformed, rising above market cap all-time highs while still below psychological price ATHs. With its rapid growth and record number of active wallets, SOL’s performance aligns with our prediction from Tuesday’s note. Memecoins PEPE and WIF also saw heightened probabilities of being listed on Coinbase, coupled with their recent price action.

Following President Donald Trump’s election victory, Bitcoin spot ETFs observed a notable reversal in capital flows, ending a streak of three consecutive days of outflows with a substantial inflow of $691.01 million on November 6, 2024, this does not include what we expect to be inflows from IBIT today given the 1-day delay in reporting. This inflow underscores a shift in market sentiment, likely reflecting investor anticipation of a more favorable regulatory environment for cryptocurrencies under the new administration.

Source: sosovalue, StoneX Digital

Trump’s team is recognized as the more crypto-friendly party, and this election saw over 247 pro-crypto candidates elected to the House and 15 to the Senate, according to Stand With Crypto’s real-time tracking. Additionally, Gary Gensler, seen by many as a key regulatory hurdle for crypto, is expected to face increased scrutiny, though we anticipate he will complete his term.

image-20241107100538-4

Source: standwithcrypto.org

Dogecoin (DOGE) has been trending of late, fueled by its recent price rise that briefly surpassed XRP, making it the 7th largest cryptocurrency by market cap. Speculation is growing around how the U.S. election results could affect DOGE, with many believing that Trump’s win and his relationship with Elon Musk could drive further price action. Large DOGE transfers from Binance to unknown wallets have also garnered attention, renewing optimism about DOGE’s potential to reach new highs and the age-old goal of hitting $1. Another sector receiving a notable bump has been DeFi. This has been a sector that has been beaten down by SEC Wells notices as well as poor ETH sentiment. There has been price action that reflects in names like $LDO (22%), $AAVE (23%), and $UNI (17%) over the past week.

Sector Commentary

Layer One / Altcoins
- Bitcoin ($BTC): Bitcoin Breaks Above $70K as Crypto and U.S. Stocks Move Higher Early on Election Day (link)
- Bitcoin ($BTC): Bitcoin set for post-election breakout, but flipping $70K to support is the first hurdle (link)
- Bitcoin ($BTC): Bitcoin Traders Wary of Price Drop in U.S. Election Week, CME Options Show (link)
- Bitcoin ($BTC): First UK Pension Fund Invests in Bitcoin (link)
- Bitcoin ($BTC): Bitcoin Hits Record High Against BlackRock's U.S. Treasury ETF as Investors Search for Returns: Van Straten (link)
- Bitcoin ($BTC): Reduced daily bitcoin inflows on US Election Day may point to lower sell pressure: CryptoQuant (link)
- Bitcoin ($BTC); Ethereum ($ETH): ETH-to-BTC market cap ratio declines to 24.52%, its lowest level since April 2021 (link)
- Bitcoin ($BTC); Solana ($SOL): Long Bitcoin Short Solana Preferred Tactical Trade Heading Into U.S. Election: 10X Research (link)
- Ethereum ($ETH): State of Michigan's state pension fund discloses over $10 million worth of Ethereum ETF holdings (link)
- Altcoins: CoinDesk 20 Performance Update: NEAR Gains 4.8% as Almost All Assets Trade Higher (link)
- Altcoins: Memecoin Creators Hop on U.S. Election Mania With Thousands of New Tokens (link)
DeFi / Stablecoins
- New Global Dollar Stablecoin Backed by Robinhood, Kraken, Paxos and Other Crypto Heavies (link)
- Citigroup, Fidelity International Unveil Proposal for On-Chain Fund With Real-Time FX Swaps (link)
Web3 / AI / NFTs
- CoinDesk Protocol Village: Pundi AI, Decentralized AI Training Project, Launches Testnet for Annotation Platform (link)
- Standard Chartered-backed Zodia Custody in talks to raise $50 million: Bloomberg (link)
- AI agents trading crypto is a hot narrative, but beware of rookie mistakes (link)
RWA / Tokenization / Metaverse / Gaming
- Chainlink, UBS Asset Management, Swift Complete Pilot to Extract Cash From Tokenized Funds (link)
Digital Infrastructure: Capital Markets / Exchanges / DAOs / Mining
- Crypto investment products hit record annual inflows of $29 billion this year: CoinShares (link)
- Here's Why Today's U.S. Election Matters for Crypto (link)
- MicroStrategy's Ambitious $42B Bitcoin Acquisition Plan Is Not Without Risks, CoinShares Says (link)
- Coinbase accused of charging substantial 'listing fees' by Justin Sun and Andre Cronje, despite CEO's assertion that listings are free (link)
- Metaplanet Gains First Index Listing With Inclusion on CoinShares' BLOCK Index (link)
- Semler Scientific Added 47 Bitcoin to Holdings, Bringing Stack to 1,058 BTC (link)
- Spot bitcoin ETFs see $541 million in outflows, largest daily negative flow since May (link)
- VanEck lists PYTH ETN in Europe (link)
- Marathon, Riot record highest monthly BTC production since April halving (link)
- Bitcoin Mining Difficulty Tops 100T for First Time, Piling Pressure on Small Miners (link)
- 'There's No Catch': Bitcoin Mining Startup Promises Free Money to Renewable Energy Companies (link)
- Telekom and Bankhaus Metzler Test Bitcoin Mining Infrastructure for Surplus Energy (link)
- If Trump wins and fulfills his promises, Ross Ulbricht will be free and Gary Gensler out of a job (link)
- Binance, CZ’s Lawyers File Motion to Dismiss Amended Complaint in SEC Lawsuit (link)

Digital Assets

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for government backed currencies (known as fiat) or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.

Purchasing cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges may not be regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

This material contained herein is intended for Institutional and Investment Professional Use Only and may not be distributed to the investing public. The views expressed are those of the author and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and StoneX Group Inc. disclaims any responsibility to update such views. Past performance is no guarantee of future results.

StoneX Financial Inc. does not act as counterparty or custodian to any virtual currency transaction(s) offered through its affiliate StoneX Digital LLC and this content should not be construed as a solicitation for futures or securities accounts.

The authors responsible for the preparation of this commentary hereby certify that all the views Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for government backed currencies (known as fiat) or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.

This material contained herein is intended for Institutional and Investment Professional Use Only and may not be distributed to the investing public. The views expressed are those of the author and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and StoneX Group Inc. disclaims any responsibility to update such views. Past performance is no guarantee of future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the- counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. StoneX Digital LLC (“SXD”) is a subsidiary of StoneX Group Inc. and is dedicated to providing institutional clients with access to multiple products and services for digital assets. SXD is not a registered broker-dealer or futures commission merchant subject to federal securities or commodity regulations and does not solicit securities or futures. SXD seeks to provide institutional clients the flexibility and tools to interact with markets on their terms and enable them to trade cryptocurrencies.

Options are not suitable for all investors. There are risks involved in any option strategy. Individuals should not enter into option transactions until they have read and understood the option disclosure document titled "Characteristics and Risks of Standardized Options," which outlines the purposes and risks of option transactions.

Exchange Traded Funds (ETFs) are subject to market risk, including the possible loss of principal. The value of the portfolio will fluctuate with the value of the underlying securities. ETFs trade like a stock, and there will be brokerage commissions associated with buying and selling exchange traded funds unless trading occurs in a fee-based account. ETFs may trade for less than their net asset value. Investors should consider an ETF’s investment objective, risks, charges, and expenses carefully before investing.

Satellite view of Earth at night showing illuminated cities across Asia and the Middle East

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

Explore subscriptions

What Bitcoin's Institutional Outflows Really Tell Investors About 2026

Institutional investors pulled $424 million from Bitcoin in a single day, erasing a brief run of small inflows. Fiona Cincotta explains why flow data, Federal Reserve policy and the Clarity Act may matter more for Bitcoin's 2026 path than the price chart.

Editorial TeamTue, 14 Jul 2026, 13:00

Digital Assets

Bitcoin Liquidity Shrinks as Central Banks Tighten

Bitcoin's long-term outlook depends on more than technical support levels and historical market cycles. Global liquidity conditions and central bank policy remain critical forces shaping demand for digital assets.

Editorial TeamThu, 02 Jul 2026, 07:34

Digital Assets

Bitcoin's Four-Year Cycle Still Points to More Weakness

Bitcoin's latest decline may be following a familiar historical pattern rather than entering uncharted territory. Previous crypto bear markets suggest the current correction could still have further to run before a durable bottom emerges.

Editorial TeamTue, 30 Jun 2026, 13:41

Digital Assets

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.

Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.

Expertise

From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.