Trump-Harris debate uncertainty putting pressure on stocks and crypto: QCP Capital

Uncertainty surrounding Tuesday night's debate between Donald Trump and Kamala Harris is impacting U.S. equities, which in turn is influencing the cryptocurrency market, according to analysts. While the cryptocurrency market cap saw a modest 1.9% gain over the past day, major tokens like bitcoin and ether remain down for the week, with declines of 3% and 6%, respectively.

U.S. stocks wavered in early Tuesday trading, with the S&P 500 giving up some early week gains and slipping 0.42%. The Dow Jones Industrial Average faced slightly steeper losses, dropping 0.5%, or roughly 200 points.

QCP Capital analysts said uncertainty in equities is affecting the crypto market , with its correlation to global stocks nearing a two-year high.

"Macroeconomic uncertainty is currently dominating the cryptocurrency market, with the 30-day correlation to the MSCI World Equity Index reaching 0.6, near a 2-year high," QCP Capital analysts noted.

The QCP Capital desk reported significant activity in the derivatives market, with investors anticipating increased volatility around tonight's Trump-Harris debate, which begins at 9 p.m. ET.

"We've seen substantial buying of bitcoin options set to expire on September 11, with 400 contracts at the $57,500 strike, indicating expectations of a price move of more than 3.3% from the current spot around $56,800 by tomorrow's expiry," the analysts added.

Trump vs. Harris debate will be closely scrutinized

Tuesday's QCP Capital report suggested that Harris' comments will be more closely watched than Trump's as market participants seek clearer insights into her economic policies.

"The market will be watching closely for Kamala's policy cues in her debut debate, especially in contrast to Trump's clearer stance on lowering corporate taxes and raising tariffs, both of which are seen as inflationary," they added.

"While bitcoin is generally seen as the 'Trump trade' due to his vocal support for crypto, we believe the real surprise could come from Harris if she brings up crypto positively during her campaign," QCP Capital analysts said.

The analysts reiterated their "structurally bullish" fourth-quarter outlook and recommended that investors focus on earning steady returns while positioning themselves to benefit from potential market gains.

"We favor earning stable yield while gaining upside convexity exposure at current spot levels," they said.