Tension mounts, but BTC, ETH, XRP, bored with election drama, hold firm

During the last U.S. presidential election, Bitcoin was still several months away from truly catching fire. Back in late October of 2016, at a time when it seemed Hillary Clinton would win the White House, BTC was clinging to low $700s. And then slowly, unnoticeably, it inched along toward $750. And then, in the days after President Trump's surprising victory, the nascent crypto carried on in much the same way, steadily crawling, like a city bus making every stop, toward $800.

A fairly flat line looking back, and yet a somewhat curious upward march; ETH and XRP, meanwhile, were way too novel as of November 2016 to be impacted by Trump’s rise and the generally populist winds blowing around the world.

Over the past week, with BTC rallying, ETH and XRP both dipped slightly as traders repositioned. BTC's move, up 3%, in one week ahead of a historic election, was seen as being mainly tied to PayPal’s big push into crypto.

Yawning after a wild weekend, BTC has risen 1.4% over the past 24 hours as of Tuesday 7 a.m. (EST).

As the election results come in over the course of Tuesday night, into Wednesday, and possibly for days beyond that, and if there is some perceived transfer-of-power turbulence, some big moves could transpire in crypto. But BTC might prove impervious to macro forces/societal unrest. As Max Keiser put it: “Bitcoin is only correlated to Bitcoin.”

In the debt market, when a bond's yield drops, its price goes up, owing to its snap attractiveness relative to newer IOUs paying out lower interest. And in the world of BTC mining, when the difficulty-level falls, miners' profit margins rise.

The roughly every-two-weeks-adjusted level was just slashed to its lowest point in nine years. End-of-rainy-season relocation activities reportedly took some large Chinese mining operations offline. Requisite mining power has fallen. At the same time, BTC’s price has risen. For the most efficient miners, margins will swell like the Yangtze in August.

Even inefficient miners will be profitable over the next few weeks (CoinDesk).

Oil prices have sunk to five-month lows. OPEC and its allies, including Russia, collectively continue to reduce output. That strategy, to try to reduce inventories, has been in play since January 2017. After the pandemic hit, any semblance of a support beam snapped in the way a cheaply made futon might fare if used as a venue for a Sumo wrestling match. With a new wave of shutdowns looming, oil prices could be on the brink of collapse.

The price of oil has fallen by more than 35% since the start of the year. Saudi Aramco, the world’s largest oil company, just reported plummeting profits, although as of Tuesday morning the company's shares were up 0.60%.

For anyone betting on a Biden win – one UK punter just laid down a $1.3 million bet on the former VP on Betfair – a monstrous Saudi oil company ticking up ahead of the election would seem unsettling, suggesting perhaps that Trump's odds are at least looking better. However, over a two-month period that ended on Wednesday, a "Biden basket" of stocks created by JPMorgan gained 4.5% versus a 16% drop for a "Trump basket."

PayPal’s crypto service will expand rapidly in 2021, executives said on an earnings call Monday. Services are coming to subsidiary Venmo and international customers during the first half of next year. Currently, only 10% of customers in the U.S. have access to the offering. Based on an initial surge of interest, PayPal already has increased weekly crypto purchase limits from $10,000 to $15,000.

Biden’s Big Backer: As mentioned, some high-conviction punter wagered $1.29 million on Biden winning the U.S. presidential election. The bet, believed by bookmaker Betfair to be the single biggest political bet in history, would pay out close to $2 million. Betfair said $337 million worth of bets have been laid down.