Bitcoin Rallies Above $70,000 On Election Day

Cryptocurrency markets rallied on Tuesday morning as U.S. voters headed to the polls to elect the next President.

Bitcoin (BTC) climbed 3% to $70,100, while Ethereum (ETH) gained 1.5% to $2,460. Solana (SOL) and Polkadot (DOT) added 5% and 3%, respectively. The global crypto market cap rose 2% to $2.44 trillion.

Dogecoin (DOGE), the day's top gainer, surged over 12% in the last 24 hours. The memecoin’s gains were largely driven by renewed support from tech entrepreneur Elon Musk.

The markets also grappled with fresh BTC outflows from Mt. Gox. The now-defunct crypto exchange transferred over $2 billion worth of Bitcoin into two newly created wallets, according to data from Arkham Intelligence.

Historical Election Trends in Crypto Markets

In 2016, Bitcoin and altcoins dipped after Donald Trump was elected president, only to recover in the following days. By contrast, when Joe Biden was elected in 2020, crypto markets responded almost immediately with bullish momentum.

Analysts at Santiment, a crypto analytics firm, noted that market sentiment during elections often reflects the uncertainty around new policies and regulations, which can drive brief market fluctuations.

“One trend is clear: cryptocurrency markets are highly sensitive to political uncertainty and can be volatile during election cycles,” the report from Santiment added. “Traders often react to policy changes, regulatory shifts, and even candidates' rhetoric, which means that as the final results are confirmed, we may see significant price movements based on perceived support or restrictions.”

While Bitcoin has remained resilient, the broader altcoin market has shown signs of weakness.

Altcoins outside the top 10 cryptocurrencies by market cap have particularly struggled, collectively dropping 45% from their highs in March to reach a $200 billion market cap, per analysis from Bitfinex.

“We believe that the altcoin market may experience further declines relative to Bitcoin in the mid-term, primarily due to the apathy of speculators. This general disinterest among investors suggests that upward momentum in altcoins is unlikely without a significant catalyst,” Bitfinex analysts wrote.

Bitcoin ETFs Record Outflows

U.S.-listed spot Bitcoin exchange-traded funds (ETFs) recorded $541 million in net outflows on Monday — the largest single-day outflow since May.

Fidelity’s Fidelity Bitcoin Trust (FBTC) recorded outflows of $169 million, followed by Ark Invest’s Ark Bitcoin ETF (ARKB) at $138 million and Grayscale’s Grayscale Bitcoin Trust (GBTC) at $90 million, per data from Farside Investors. BlackRock’s iShares Bitcoin Trust (IBIT) was the only ETF to record net inflows, attracting $38 million.

Stock markets ticked up on Tuesday, with the Dow Jones, S&P 500, and Nasdaq-100 all climbing 1%.

Investors are also looking ahead to the Federal Reserve’s rate decision on Thursday. There is a 98% chance of a quarter-point cut following September’s half-point reduction, according to the CME Group’s FedWatch Tool.