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Cryptocurrency News Articles
Bitcoin's 'Coinbase Premium' Jumps to Two-Month High as Prices Top $74K Amid Trump's Early Lead
Nov 06, 2024 at 10:04 am
Bitcoin's "Coinbase premium," a key metric gauging stateside demand for the leading cryptocurrency, is flashing green again amid reports of an early lead
Bitcoin's "Coinbase premium," a key metric gauging stateside demand for the leading cryptocurrency, is flashing green again amid reports of an early lead for pro-crypto Republican candidate Donald Trump in the U.S. election.
The "Coinbase Premium Index" measures the price difference for bitcoin on Coinbase, which is widely used by U.S. users and many institutional market participants, compared to the off-shore exchange Binance, the leading exchange by trading volume.
The price differential turned positive during Wednesday's early Asian hours and jumped to 0.06, the highest since Sept. 14, according to data tracked by analytics firm CryptoQuant.
Price rallies are said to be more sustainable when the cryptocurrency trades at a premium on Coinbase, reflecting stronger buying pressure from sophisticated traders and stateside institutions.
Bitcoin (BTC) rose over 7% in Asia, topping the $74,000 mark for the first time as early trends by the Associated Press showed Trump winning Kentucky, Florida, West Virginia, and another four electoral college votes, outpacing his rival Kamala Harris. At press time, Trump leads the electoral map 101 to 71, according to the Associated Press.
On decentralized predictions platform Polymarket, traders now see a 75% chance of Trump winning the presidential election.
In traditional markets, the dollar index, which tracks the greenback's value against major fiat currencies, jumped 1.3% to 104.80, reaching the highest since July 30, according to data source TradingView. The yield on the U.S. 10-year Treasury note jumped 16 basis points to 4.44%.
The dollar rally likely stems from Trump's plans to impose tariffs across the board, with a 60% duty on imports from China. "If Trump wins and puts a 60% tariff on China, we'll see a rise in the Dollar unlike anything in the past. China has only one option in response to tariffs: allow the RMB to fall hard and fast. That will pull down all of EM, which is collateral damage in the U.S.-China trade war," Robin Brooks, a senior fellow at the Brookings Institution, said on X.
Bitcoin has historically moved in the opposite direction of the dollar. The negative correlation, however, is being tested as a potential inflationary impact of trade tariffs could boost demand for perceived store-of-value assets like bitcoin and gold.
3:06 UTC: Adds commentary on traditional markets.
Edited by
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