November 8, 2022, was election day for the midterms in the US, and the stock market responded by getting off to a very hot start at the beginning of the trading day.
However, by midday the stock market, major indexes, and the cryptocurrency market all experienced dramatic downturns. Perhaps it could be said that none had as dramatic drops on the day as Bitcoin and Ethereum which each fell by as much as 20% at different points of the day.
What Happened Across The Market?
With regards to the stock market, indexes got off to a very hot start from the opening bell on Wall Street. The S&P 500 rose as much as 50 points on the day and finished Tuesday slightly over half a percentage point on the day. The DOW Jones Industrial Average rose by more than 400 points for the second consecutive day by midday before an extended cooling-off period. The index dropped below its open before recovering to close the trading day at a little over a 1% day-to-day gain.
The cryptocurrency market saw red as a whole on Tuesday during the trading day and until now, well after, at the time of writing. The latest Bitcoin news released this past Tuesday morning was almost completely centered around a phenomenal start to the day for BTC.
The pioneer digital asset jumped above the $20k mark again after falling below the pivotal level on the night prior. The surge was short-lived though, as the top digital asset by market capitalization ranking dropped well below $18,000 per Bitcoin, to around $17,300, before recovering back above $18,000. At the time of writing, BTC is trading around $18,400.
Ethereum And The Altcoin Space
The Ethereum ecosystem suffered quite a blow in the charts, just as more institutional clients get set to begin entering the space. Fidelity, and the asset management giant Blackrock has begun offering their clients cryptocurrency investment options just recently, while JP Morgan & Chase dives deeper into the blockchain, as the investment bank performed its first decentralized transaction a week ago using the Ethereum-based Polygon network. During the day’s events in the market, Ethereum dropped as low as $1,231 by midday after reaching a price high of over $1,575 per ETH. The $344 dollar difference created a massive red line in the chart of the largest altcoin in the crypto market.
The sentiment was rather similar with regard to BNB. News of Binance making plans to acquire FTX was thought to have an effect on the price of BNB which skyrocketed at the beginning of the day after the major crypto news first broke. But by midday, the second largest altcoin by total market capitalization next to Ethereum had also taken a similar dive.
BNB got off to a hot start, beginning the day around $324 per coin when the stock market opened, before rising to over $393 per coin, for a massive gain of almost 20%. The gains were also short-lived for the BNB ecosystem, as the altcoin dropped to below $300 at its lowest, down about 33% from its peak on the day. The digital asset native to the BNB Smart Chain did recover to its original starting price on the day and is trading around $327 per BNB at the time of writing.
Election Day Over And What Remains To Be Seen
The talk around Washington D.C. has been about the midterm elections and the impact they could have on the macroeconomic outlook. Many professional investors and finance professionals have expressed the belief that the Republican party taking majority control of the Senate and Congress would potentially mean a boost across financial markets through the remainder of 2022 and into Q1 2023.
If the Republicans are able to secure the majority control of the US House of Representatives and the US Senate, it is believed by many that it could fare well for the tax and legal implications for the cryptocurrency community, and also large corporations, giving a more positive overall market sentiment for the close of 2022 and Q4.
As always, the market will have the last say. The eyes and ears of all traders, investors, financial experts, as well as many members of the general public will be tuned into the stock market and other global markets to see how things progress. What will come of the US political landscape from here, and exactly what impact that may have on the financial market which has been hit hard by Federal Reserve tightening lately, still remains to be seen.
