Large scale liquidations, a spike in memecoin trading activity and heavy losses across prediction markets followed Joe Biden’s announcement that he will be dropping out of the election.
Posted July 22, 2024 at 3:41 am EST.
U.S. President Joe Biden has dropped out of the 2024 presidential election race, endorsing Vice President Kamala Harris as the Democratic party’s nominee. U.S. futures inched slightly higher following the unprecedented Sunday announcement, but naturally, the news had a more immediate impact on the digital asset market which trades 24/7.
The price of bitcoin sold off by nearly 3% to an intra-day low of $66,000, but quickly regained lost ground over the hours that followed, and was trading at around $67,370 at the time of writing.
The initial and sudden decline likely impacted crypto traders with significant leverage, as evidenced by the $175 million worth of liquidations over the last 24 hours. Data from CoinGlass shows that $112 million of those liquidations were from traders in long positions.
Biden’s announcement also had repercussions for traders on crypto prediction markets. Notably, one trader on the Polymarket platform called “AnonBidenBull” lost a whopping $2 million from his positions betting on a favourable outcome for Biden in the November election.
Elsewhere, Biden-inspired memecoins also saw witnessed large spikes in trading activity. The Solana-based memecoin BODEN dropped 57% to a low of $0.00959 after the news, shedding $10 million from its market capitalization.
JILLBODEN, a memecoin linked to the First Lady, saw an 82% drop in value, while KAMA, a relatively newer and more illiquid token linked to Vice President Harris, surged 200% after the announcement. Harris’ candidacy is not a done deal, and expectations are still up in the air around whether her stance on crypto will be favourable.
“With Joe Biden dropping out of the US Presidential race, no credible candidate can seriously challenge Donald Trump,” wrote 10x Research founder Markus Thielen in a July 21 report.
“The November election appears to have been decided without a single vote. For Bitcoin, a pro-crypto administration will enter the White House.”
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