Bitcoin drops, Yen rises: markets react to disappointing Trump-Harris debate outcome
It’s a risk-off day in Asia as the financial markets react to the perceived victory of US Vice President Kamala Harris over former President Donald Trump in the second presidential debate. This development sent Bitcoin (BTC), the leading cryptocurrency by market value, down over 2% to $56,300. The broader crypto market also took a hit, with the CoinDesk 20 Index falling nearly 2.5%, according to CoinDesk data.
Dogecoin (DOGE) was the hardest hit among major tokens, plummeting 4% in the past 24 hours, according to CoinGecko data. Other cryptocurrencies like XRP, Solana’s SOL, Ether (ETH), and BNB Chain’s BNB saw little change in their prices.
Despite the overall market downturn, bitcoin exchange-traded funds (ETFs) saw a positive trend, extending inflows for a second consecutive day after a record losing streak. Fidelity’s FBTC product led the charge, bagging $117 million in inflows.
Earlier this year, Trump began actively courting the crypto community, positioning Bitcoin and the broader crypto market as key components of his presidential campaign. This strategy led traders to closely monitor the odds of Trump and Harris on the betting platform Polymarket. According to Polymarket traders, Harris won the first debate against Trump, who had previously debated Joe Biden before the President dropped out and passed the torch to Harris.
In traditional markets, futures tied to the S&P 500 dropped 0.4%, while Chinese stocks fell to a seven-month low. Throughout the discussion, Trump protected his approach during trade tariffs, reasoning that they shouldn’t stimulate U.S. consumer backpedalling to the previous prices of raw materials. The Japanese yen, on the other hand, a safe-haven currency became stronger over 140.70 against the US dollar, the highest point in January, after the interest rate hike by the Bank of Japan that is still boosting the unwinding of the risk-on yen carry trades.
The debate’s impact extended to Trump-themed Political Finance (PoliFi) tokens, which suffered significant losses. The MAGA (TRUMP) token dropped 11.7%, Solana’s Doland Trump (TREMP) token fell 27%, and the MAGA Hat (MAGA) token declined by 23.5%. In contrast, the Harris-themed ‘Kamala Horris’ (KAMA) token rose by 7.6%. Overall, the PoliFi category’s market cap fell by 8.8% to just over $540 million.
Polymarket bettors now see a 56% chance of another debate occurring and a 27% chance that Trump will fire his campaign manager. Trump’s post-debate appearance on Sean Hannity’s Fox News show has been interpreted by some observers as an indication that his campaign was not satisfied with his debate performance.