Crypto markets experienced a decline on Wednesday due to a combination of factors including a drop in U.S. equity prices and uncertainty surrounding the presidential election race. Bitcoin (BTC) saw a sharp drop from $65,000 to $63,500 within a span of two hours during mid-morning trading in the U.S., marking a 1.7% decrease over the past 24 hours. Other major cryptocurrencies like Ethereum (ETH) and Solana’s native token (SOL) also experienced minor losses, with declines of over 1%.
Smaller digital assets took an even bigger hit, causing the Coindesk 20 Index (CD20) to fall by 2.8%. Ripple’s XRP, Polkadot’s DOT, Cardano’s ADA, and Polygon’s MATIC saw the most significant drops, ranging from 5% to 6%.
The price movements in the crypto market mirrored the struggles in U.S. equities, with the Nasdaq 100 and S&P 500 both experiencing declines of 1% and 0.7% respectively. The uncertainty surrounding the U.S. presidential election intensified as reports emerged of increasing pressure on President Biden to not seek re-election.
Traders on the prediction market Polymarket now believe there is an 80% chance of Biden withdrawing from the race, up from 40% the day before. Additionally, the odds of Vice President Kamala Harris becoming the Democratic nominee surged to 63% from 15% within a day. On the other hand, GOP nominee Donald Trump’s chances of winning slightly decreased to 65% from a high of 70% following an assassination attempt over the weekend.
The recent rally in crypto prices was partly attributed to investors’ optimism about a potential Trump victory and a more crypto-friendly administration in the U.S. However, the current uncertainty has led to a correction in the market as traders reevaluate their positions.
Overall, the crypto market remains volatile as it reacts to external factors such as political developments and equity market movements. Investors should stay informed and exercise caution during these turbulent times to navigate the market effectively.