Long Bitcoin Short Solana Preferred Tactical Trade Heading Into U.S. Election: 10X Research

Daily transaction fees on Solana have cooled significantly from record highs reached last month, providing bearish cues to the SOL token.

Daily transaction fees on the Solana network have dropped to $2.5 million, down from a record high of $5 million on Oct. 24, data from Artemis and TokenTerminal shows. This decline in fees could be bearish for the SOL token.

With the U.S. presidential election just hours away, markets are bracing for a potential market-moving event that could make or break directional traders. In light of this, 10x Research is suggesting a pair trade that could be used to navigate the expected election-led turbulence.

Markus Thielen, founder of 10x Research, is suggesting a tactical trade that involves going long on bitcoin and short on solana in the lead up to the election. Thielen explained in a note to clients on Monday that the election will have varying implications for different crypto assets, especially in the context of potential approval of a U.S.-based exchange-traded fund (ETF) tied to alternative cryptocurrencies, like solana (SOL).

"A tactical trade heading into the election could involve going long bitcoin and short solana. The rationale is that solana is more exposed to approval of altcoin ETFs, with solana being included in 21Shares' solana ETF," wrote Thielen.

"If Harris wins, the likelihood of these ETFs getting approved may decrease, potentially leading to a 15% drop in solana, while bitcoin might experience a more limited decline of around 9%."

On the other hand, a victory for Trump could lead to solana, bitcoin and ether rising by around 5%, the note said. BTC and ETH might see bigger gains than SOL on potential Trump victory, as spot ETFs tied to bitcoin and ether are already trading in the U.S. and have amassed billions of dollars in investor money this year.

Availability of an alternative investment vehicle might translate into bigger gains in anticipation of favorable regulatory policy under Trump's presidency.

Solana has yet to get its first spot in an ETF. Currently, VanEck, 21Shares and Canary Capital have filed for solana ETFs with the U.S. SEC.

"Another reason to be short solana is that daily transaction fees on the solana network have cooled to $2.5 million, hitting a record high of $5 million on Oct. 24, Artemis and TokenTerminal data shows. Similar drop-offs in fees have weighed on the token prices."

As of writing, the SOL-BTC ratio traded at 0.00235 on Binance, TradingView chart data shows.