Last night’s US presidential debate triggered risk-off sentiment in the cryptocurrency market, sending Bitcoin prices tumbling as investors reacted to the televised debate between Donald Trump and Vice President Kamala Harris.
Analysts attributed the 2.6% drop in Bitcoin's price from $57,700 to $56,100 to Trump's poor performance compared to previous debates.
“The US presidential debate was a news-selling event where Trump underperformed his debate against Biden,” Bitfinex analysts said. Trump’s failure to outperform Harris contributed to the market’s risk-off reaction, they said. Bitcoin has since staged a slight recovery and is trading around $56,400.
Market analysts noted that the debate further intensified risk-aversion behavior, pointing out that a Trump victory is generally seen as positive for risky assets, including cryptocurrencies. Trump’s interest in crypto has become more apparent in recent months, particularly with news of his decentralized finance (DeFi) project and campaign promises to oust U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler.
Analysts at QCP Capital have warned that the uncertainty surrounding the November 5 election could create further risk-off sentiment in the crypto market. “The lack of a clear frontrunner, combined with unclear policy stances from both parties, increases the likelihood of volatility in risk assets as we approach election day,” the analysts wrote.
BRN analyst Valentin Fournier added that Harris’ debate performance may have put downward pressure on Bitcoin, prompting the market to reassess her chances of winning. “Harris’ policies are seen as a bearish signal for Bitcoin, as they could delay the progress made under Trump,” Fournier said.
*This is not investment advice.