According to analysts, uncertainty surrounding the debate between Donald Trump and Kamala Harris on Tuesday night is impacting U.S. stocks, which in turn is impacting the cryptocurrency markets. The cryptocurrency market cap has seen a slight increase of 1.9% over the past day, but major tokens such as Bitcoin and Ether have been on the downside, falling 3% and 6% respectively this week.
U.S. stocks were shaky in early trading Tuesday, with the S&P 500 giving up its gains from earlier in the week to fall 0.42%. The Dow Jones Industrial Average was slightly lower, down 0.5%, or about 200 points.
Analysts at QCP Capital said that uncertainty in the stock market is impacting the cryptocurrency market, with correlations with global stocks nearing two-year highs.
“Macroeconomic uncertainty currently dominates the cryptocurrency markets, with the 30-day correlation with the MSCI World Equity Index reaching 0.6, nearing its highest level in two years,” QCP Capital analysts noted.
The QCP Capital desk reported significant activity in the derivatives markets, with investors expecting increased volatility ahead of the Trump-Harris debate, which begins tonight at 9 p.m. ET.
The analysts added that “there was significant buying in Bitcoin options expiring on September 11, with 400 contracts being traded in the $57,500 range, which would push the price up by more than 3.3% from the current price of $56,800 by expiry tomorrow.”
Trump-Harris Debate Will Be Closely Scrutinized
A QCP Capital report on Tuesday suggested Harris’s comments will be watched more closely than Trump’s as market participants seek clearer insight into her economic policies.
“Markets will be watching closely to see what policy signals Kamala sends in the first debate, especially as Trump has been more explicit on corporate tax cuts and tariff increases, both of which are seen as inflationary,” they added.
“While Bitcoin is generally seen as a ‘Trump deal’ due to Trump’s enthusiastic support of cryptocurrencies, we think it would be a real surprise if Harris were to mention crypto positively during the campaign,” QCP Capital analysts said.
The analysts reiterated their “structurally bullish” fourth-quarter outlook and advised investors to focus on generating steady returns while positioning themselves to take advantage of potential market gains.
They said, “We prefer to secure upside convexity exposure at current spot levels while also generating stable returns.”
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