Trump-Themed PoliFi Tokens Buck Bitcoin Downtrend as China Stimulus Hopes Return

As a seasoned crypto investor with roots deeply entrenched in both Asia and the U.S., I’ve seen my fair share of market fluctuations and political dramas. This week, the Trump-themed PoliFi tokens have been the talk of the town, outperforming a sluggish market as Trump’s odds on Polymarket soared. It’s not every day that politics and crypto intersect in such an entertaining manner!

This week, Political Finance (PoliFi) tokens related to Donald Trump’s political campaign showed reduced price fluctuations, contrasting with the calmness in bitcoin and other cryptocurrencies. The increased likelihood of Trump winning the presidential election on Polymarket boosted his chances to a two-month peak.

On Thursday in U.S. trading hours, Bitcoin dipped by approximately 4%, but it rebounded during the Asian morning on Friday and currently trades above $60,000. This recovery came amid fresh concerns about potential regulations that have resurfaced, causing market unease.

This week, assets related to Trump’s MAGA movement, such as the MAGA token (TREMP), the MAGA hat, and the general MAGA theme, have all seen significant increases. Leading the pack is the MAGA brand itself, which has surged 55% this week, pushing its market cap above $200 million. The MAGA hat has experienced an even more impressive rise of 102%, and the TREMP token has increased by 93%.

PoliFi represents a collection of digital assets, including tokens and meme coins, which have seen increased popularity this year. These assets enable communities and traders to engage in predictive trading related to political figures by utilizing market trends.

In my role as a researcher, I find it noteworthy that my analysis shows a significant increase in the likelihood of Donald Trump securing victory in the upcoming U.S. Presidential Election, according to the prominent prediction market, Polymarket. This spike marks a high point unseen since over two months ago.

By this coming Friday, it appears that traders on Polymarket are predicting a 55.8% chance for the former president and a 43.8% chance for Vice President Kamala Harris, based on bets totaling over $1.6 billion placed on the upcoming November election.

However, some market watchers await broader economic data before placing larger bets.

As an analyst at SOFA, I recently shared in a message to CoinDesk that while Trump’s election odds have shown a rebound, this hasn’t significantly improved overall sentiment. Instead, it seems the market is more concerned with how much of the FTX creditor claims’ income will be funneled back into cryptocurrency.

Currently, the CoinDesk 20 (CD20) – a measure that follows the movement of major digital assets – is relatively stable, showing a modest increase of just 0.5% so far.

Renewed China Stimulus Hopes

Traders could choose to observe the extent of China’s economic stimulus actions before deciding on their next steps.

According to Bloomberg, it is anticipated by market participants in China that they may receive approximately 2 trillion yuan ($283 billion USD) in new fiscal aid as soon as this coming weekend.

In various parts of China, the People’s Bank of China (PBoC) has initiated a $70.6 billion fund known as the Securities, Funds, and Insurance Companies Swap Facility. According to Caixin, this fund will enable financial institutions to swap their bonds, ETFs, and specific stock holdings with the PBoC for government bonds. The received government bonds can then be utilized by these institutions to obtain additional financing for purchasing stocks, serving as a means of market stabilization.

In essence, is the information provided relevant for crypto investors who aspire to witness Bitcoin reach a new peak? Perhaps not.

According to BCA Research, although China’s recent significant stimulus has ignited surges in stocks and digital assets such as bitcoin (as previously reported by CoinDesk), the impact might not be long-lasting. This is because the current level of new credit flow, or “credit impulse,” is insufficient to generate a robust economic surge similar to past periods like 2015.

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Shaurya serves as the Deputy Head of the Data & Tokens department, with a primary focus on the field of decentralized finance, market analysis, on-chain data, and governance structures spanning both major and minor blockchain networks.