Bernstein reiterates: Bitcoin is expected to rise to $80,000-90,000 if Trump is elected president, Polymarket odds diverge

Bernstein's analysts reiterated their forecast that if Donald Trump wins the presidential election next month, the price of Bitcoin could reach $80,000 to $90,000, while his recent Polymarket odds have diverged. While the analysts expect Bitcoin to perform well in the long run regardless of the outcome, they said that if Kamala Harris wins, Bitcoin could test the $40,000 range again. Analysts at research and brokerage firm Bernstein reiterated their forecast that if Donald Trump wins the US election next month, Bitcoin prices could hit a new all-time high of $80,000 to $90,000. Since Vice President Kamala Harris accepted the Democratic nomination, there has been the greatest divergence in support for the former president. Trump is positioning himself as a pro-crypto candidate this year - accepting crypto donations and outlining policies such as turning the US into a Bitcoin mining "superpower", appointing a crypto-friendly SEC chair, and establishing a national strategic Bitcoin reserve. In contrast, Harris has only recently mentioned cryptocurrency in any speech or policy statement, and last month she made broader comments saying she would encourage crypto businesses while protecting consumers, and that the US should be a "leader" in blockchain, with digital assets being part of her "opportunity economy" vision. While Bernstein analysts believe that in the context of low interest rates, the US fiscal deficit, and unprecedented debt levels, Bitcoin will perform well in the long run regardless of the election outcome, the near-term reaction to the election could be significant. Gautam Chhugani, Mahika Sapra and Sanskar Chindalia wrote in a report to clients on Wednesday: "A Trump win would be positive for Bitcoin and the crypto markets." "If Trump wins, we expect Bitcoin to hit new highs (80,000 to 90,000 USD), surpassing the previous high of 74,000 USD. If Harris wins, we believe Bitcoin could fall to around $40,000, a new low (which it has never fallen below in the recent correction)." Meanwhile, the analysts expect Bitcoin to continue reacting to election odds, becoming more bullish if Trump's chances of winning increase. Conversely, if the race remains "too close to call", they expect Bitcoin to trade in a range ahead of the November 5th election. However, their views on altcoins differ, with Chhugani, Sapra and Chindalia expecting cryptoassets like ETH and SOL to trade in a range ahead of the election, regardless. The analysts predict that other cryptocurrencies will only take a decisive direction after the election, as "the pecking order of the SEC chair and White House regulatory assistant will become clearer, given the close linkage of blockchain development with the regulatory environment." Is Polymarket biased against Trump? The analysts point out that Polymarket is the world's most liquid election prediction platform, with over $1.5 billion in bets on the US presidential election alone, around $311 million on the general election winner, and $60 million on the seven swing states. Since Polymarket is a blockchain-based platform and Trump has publicly supported cryptocurrencies, some believe the decentralized global market may have an inherent bias towards the Republican candidate. However, the Bernstein analysts believe users are more likely to put real money on probabilities rather than truly reflecting their biases - and add that the platform's ample liquidity would preclude any attempts at bias or market manipulation. "Apart from Trump's recent divergence, Harris' odds have been leading Trump's, which is quite evident. Secondly, crypto investors who are already long crypto are more likely to long Harris as a hedge," they said. "So we would rather expect more demand for Harris from crypto investors. Additionally, for this kind of volume, Polymarket would have other bettors apart from crypto investors." Trump's divergence on Polymarket The analyst points out that Harris has led Trump on Polymarket in two phases. First, when she was announced as the Democratic candidate, this lead lasted for several weeks until the market became "too close to call". Secondly, after the September 10th debate, where Harris performed well, she led Trump by 6% on Polymarket, before reverting to a 50/50 scenario. However, on Monday, after Trump's weekend rally in Butler, Pennsylvania - where the former president narrowly avoided an assassination attempt in July - the Polymarket odds suddenly diverged, with Trump briefly leading Harris by 8%. Previously, tech billionaire Elon Musk also attended the pro-Trump rally in Butler, saying Polymarket is "more accurate than polls" because "real money is at stake". However, the analysts say the latest national polling average still shows this is a "toss-up" race, with numbers within the margin of error indicating Harris leading by 3%. They added: "Nate Silver's Bayesian model, using recent polls as inputs, now has Harris leading by 3%, but his commentary still indicates this is a 'toss-up' race." Chhugani, Sapra and Chindalia point out that at the same stage before the 2016 election, Hillary Clinton led by 5% in the polls, and Joe Biden led by 3% in 2020. However, they say that given polls have historically underestimated Trump, the question is whether Harris' polling lead should be larger for a clear victory. Currently, Trump is leading Harris by 7% on Polymarket, with a 53.2% chance of winning the US presidential election, compared to 46.2% for Harris. Meanwhile, the analysts note that the swing state markets on the platform have Trump leading by over 20% in absolute terms in Arizona, Georgia and North Carolina. In Pennsylvania, the gap was smaller before the Butler rally, with Trump now leading by 9%, while Harris continues to lead in Wisconsin (4%) and Michigan (6%), though the margins are narrowing.