Dollar pulls back during US election, bitcoin crashes

New York — The dollar was down slightly against the euro on Tuesday in the midst of the legislative elections in the United States, while bitcoin collapsed to its lowest level in two years in the wake of the recovery in extremis of the platform of FTX cryptocurrencies by Binance.

Around 2:30 p.m. Quebec time, the greenback fell 0.37% to US$1.0057 for one euro.

“If Republicans regain control of the Senate, House of Representatives, or both, the result will be a two-year legislative stalemate, with no major policy reforms to pass before 2024,” said Deutsche analyst Jim Reid. Bank.

“Even though election results can be disruptive, especially in the case of contentious contests which may take some time to tally, markets seem to be betting on a stalemate for the government, assuming Republicans will take control. of Congress,” also noted Shaun Osborne of Scotiabank.

A crippled US government seems to have market favor on many levels, as it involves fewer policy changes, rules out new regulations for sectors like energy, banking or healthcare, differs from major tax code changes.

But in the forex market, surprise came from the cryptocurrency camp when industry-leading virtual currency platform Binance unexpectedly announced it was buying up seemingly struggling rival FTX.com.

The announcement caused cryptocurrencies to wobble. Bitcoin fell 15.22% to US$17,535 around 2:30 p.m., its lowest since November 2020.

Ether, the cryptocurrency linked to the Ethereum blockchain, fell more than 21% to US$1,945.

No financial details were disclosed in the takeover deal, but Binance boss Changpeng Zhao acknowledged on Twitter that the deal was driven “by a significant lack of liquidity.”

The news also had an impact on the stock market on the shares of crypto-asset platforms. The title of Coinbase lost 12.82%, Robinhood melted by more than 17%.