Bitcoin Recovers from Inflation-Induced Losses

CoinDesk 20 Index: 1,908.58 +1.34%

Bitcoin (BTC): $61,001.69 -0.04%

Ether (ETH): $2,410.36 +0.74%

S&P 500: 5,780.05 -0.21%

Gold: $2,640.19 +0.28%

Nikkei 225: 39,605.80 +0.57%

Bitcoin recovered above $61,000 today, following its 4 percent drop yesterday. BTC, which dropped to $59,000 in September following the US CPI report pointing to higher than expected inflation, took a big hit as investors lost hopes that the Fed would make another 50 basis point interest rate cut next month. The overall crypto market, as measured by the CoinDesk 20 Index, gained 1.65% in the same period. XRP and DOGE led the way, gaining approximately 2.5 percent and 2 percent, respectively.

Polymarket’s odds of Donald Trump returning to the White House have reached their highest level in more than two months. Investors are placing a 55.8% chance of the former president winning against Vice President Kamala Harris’ 43.8% on the prediction market platform, where more than $1.6 billion has been bet on the November election. Trump’s chances of winning rose to current levels days after President Joe Biden announced that he would not re-run the elections. Another prediction market, Kalshi, which recently received permission to list contracts based on the US elections, shows that Trump may have a lead over Harris. The rates are 52% to 48%.

Crypto exchange Bitnomial has filed a lawsuit against the SEC, saying the regulator exceeded its jurisdiction in trying to regulate the XRP futures contract with the CFTC. In a filing Thursday with the U.S. District Court for the Northern District of Illinois, the company said futures trading falls solely within the purview of the CFTC and that the SEC’s involvement would significantly increase the company’s regulatory burden. The exchange confirmed on August 9 that XRP futures do not violate the CFTC’s regulations. “Bitnomial disagrees with the SEC’s view that XRP is an investment contract and therefore a security, and therefore XRP futures are security futures,” the filing stated.

The chart shows bitcoin’s price performance in the months following the 2012, 2016 and 2020 US presidential elections. Bitcoin averaged a gain of over 4,000% in the 400 days after the elections. ETC Group analysts: “Past US elections have shown that bitcoin’s 2012 Bitcoin saw its excellent performance in the 2016 and 2020 election cycles supported by both Bitcoin halving events and dips in US business data.”Source: ETC Group, Bitwise.