"The Pump for Trump" - Crypto Welcomes Trump's Improved Odds

File image: Official White House Photo by Shealah Craighead.

Rising odds of a Trump victory in November are having a noticeable impact on financial markets, including the crpytosphere.

The Dollar has benefited from increased odds of a Trump win, while a rise in crypto coin valuations has been branded as a "pump for Trump" by analyst Manuel Villegas Franceschi at Julius Baer.

"Crypto has been politicised," says Franceschi. "The odds are well in Trump’s favour; prediction platforms register the probabilities at around 55%. Crypto prices have slightly rallied because of this."

Nate Silver - one of the most respected pollsters in the U.S. - says his model shows a clear increase in support for Trump since last week's televised debate with Joe Biden.

"We've got a string of polls in... they’re mostly poor for Joe Biden, and they’re beginning to have a bigger impact on the model... Trump now leads by 2.7 points in our national average. And Biden’s win probability has dropped to 28% from 35% on debate night," says Silver.

Franceschi says the Democratic Party is not very fond of cryptos, citing Biden’s recent veto of congressional disapproval of the U.S. Securities and Exchange Commission's accounting bulletin on crypto assets.

"By virtue of invoking the Congressional Review Act, this Republican-led resolution would inappropriately constrain the SEC's ability to set forth appropriate guardrails and address future issues," Biden said in a statement released by the White House.

SEC Chair Gary Gensler "is not a fan of the digital assets sector," says Franceschi, and Gensler's replacement would potentially aid the sector.

More broadly, the analyst thinks a Republican sweep would have several positive consequences on crypto.

"Regulation and legislation would likely become more comprehensive, Republicans, including those in Congress, and the watchdogs led by the US House of Financial Services believe in the idea that innovation has to remain in-house," he explains.

"This would certainly provide tailwinds for crypto service providers to continue growing in the US, especially if they can properly understand whether the assets are labelled as securities or commodities in the eyes of the regulators," adds Franceschi.