As the U.S. presidential election draws near, there is anticipation of significant market volatility that could pose challenges for traders. In light of this, 10x Research has proposed a strategic trade involving two major cryptocurrencies, Bitcoin (BTC) and Solana (SOL) token, as a way to navigate the potential turbulence expected during the election period.
Markus Thielen, the founder of 10x Research, suggested that a tactical trade leading up to the election could entail taking a long position on Bitcoin and a short position on Solana. According to Thielen, the outcome of the election could have a significant impact on digital assets, including the possible approval of a U.S.-based exchange-traded fund (ETF) linked to alternative cryptocurrencies like SOL.
Thielen pointed out that if Kamala Harris were to win the election, the chances of these ETFs being approved might decrease, potentially resulting in a 15% decline in Solana’s price. On the other hand, Bitcoin could experience a more moderate drop of around 9%. In the event of a Trump victory, SOL, BTC, and Ether could see a rise of approximately 5%.
Bitcoin and Ether might experience more substantial gains than Solana in the event of a Trump victory, as ETFs tied to these two cryptocurrencies are already trading in the U.S. market and have attracted significant investor capital this year. The availability of alternative investment options could lead to larger gains in anticipation of favorable regulatory policies under a Trump administration.
While Bitcoin and Ether have established ETFs in the U.S., Solana is yet to secure its first spot in an ETF. Several firms, including VanEck, 21Shares, and Canary Capital, have filed for Solana ETFs with the U.S. SEC. The lack of an ETF for Solana could be a reason to consider shorting SOL, along with the recent decrease in daily transaction fees on the Solana network.
As of now, the SOL-BTC ratio is trading at 0.00235 on Binance. The drop in daily transaction fees on the Solana network, along with the lack of an established ETF, could potentially impact Solana’s price performance compared to Bitcoin in the lead-up to the election.
In conclusion, as the U.S. election approaches, traders are advised to consider the potential impact of the election outcome on different cryptocurrencies and explore tactical trading strategies to navigate the expected market volatility. By staying informed and analyzing the implications of political events on digital assets, traders can position themselves strategically to capitalize on market opportunities.
