Investing.com -- Bitcoin has become a focal point of the US presidential campaign. Following the shift in Polymarket odds and polling in Harris’s favor, the original cryptocurrency has been trading in a range, recently touching $61,000 before dropping back to around $58,000.
Bernstein analysts expect that the Bitcoin market will remain range-bound until the election picture becomes clearer, possibly closer to the Presidential debates.
As for the crypto markets, Bernstein interprets the current sentiment as bullish for Trump and bearish for Harris.
"The Trump-led Republican side has made a strong pitch to crypto voters, promising favorable policies and even hinting at a national Bitcoin reserve," Bernstein analysts said, in a note Monday. In contrast, while some Democrats have supported crypto, the broader community remains cautious, seeking more concrete actions amid ongoing regulatory challenges.
The broker is also interested in seeing whether Polymarket's blockchain-based liquid markets will provide more accurate signals than traditional polls, marking it as a "true crypto killer app."
Polymarket has emerged as the most liquid election market this U.S. election season, handling over $500 million in bets and capturing more than 80% of the market share, according to Bernstein.
Unlike traditional election polls, which are often criticized for bias, Polymarket is seen as reflecting more "skin in the game," though its predictive power remains under scrutiny.
Bernstein argues that since the nomination of Vice President Kamala Harris, Polymarket trends have shifted in her favor. "Harris's odds began climbing after the first Biden vs. Trump debate on June 27 and surged further after her nomination on August 2," Bernstein analysts wrote. As of now, Harris’s 'Yes' odds have surpassed those of Trump by more than 6%, with Harris at 52% compared to Trump’s 46%.
The rise in Harris’s odds on Polymarket caused unease in the crypto markets, with Bitcoin struggling to regain its previous highs of around $70,000. Some Republican supporters have dismissed the Polymarket odds as a temporary "honeymoon phase," arguing that the odds can be manipulated by significant bets.
However, Bernstein analysts believe that the Polymarket odds are merely reflecting the momentum Harris has gained in recent polls, noting that the 538 project average shows Harris leading Trump by 2.4%.
"The Polymarket odds are probably as good or bad as the election polls in predicting the outcome," they noted, adding that the true test will come after the Presidential debates in September.