Long Bitcoin Short Solana: A Tactical Trade for the U.S. Election

As the U.S. presidential election approaches, crypto investors are bracing for potential market turbulence. 10X Research, a leading crypto research firm, has proposed a strategic pair trade to help investors navigate this storm: go long on Bitcoin (BTC) and short on Solana (SOL). This approach is driven by recent trends in Solana's network activity and potential shifts in the regulatory landscape post-election.


**Why Short Solana?**

Solana, despite its high-speed blockchain, has shown some red flags lately. Transaction fees on the network have halved, dropping from $5 million in late October to $2.5 million. This dip signals waning demand, which historically doesn't bode well for token prices. Additionally, the election's impact on the crypto market could be significant. If Kamala Harris wins, we might see less chance of U.S.-based ETFs tied to alternative assets like Solana getting approved, which could trigger a steep drop for SOL – potentially around 15%. Bitcoin, being a more established asset, might fare slightly better with a smaller 9% dip.


**A Tactical Play as Election Day Nears**

With the presidential race tighter than ever, this long BTC-short SOL pair trade might be a smart play to hedge against the unknown. The latest SOL-BTC trading ratio sits at 0.00235, underscoring the cautious sentiment among investors as Election Day draws near. Whether the market moves in favor of Bitcoin or Solana will largely depend on the White House's future occupant and their stance on crypto regulation.


In conclusion, 10X Research's tactical trade of going long on Bitcoin and short on Solana ahead of the U.S. election is a strategic move to navigate potential market turbulence. By capitalizing on Solana's recent performance and potential regulatory changes, investors can position themselves for potential gains while mitigating risks. As always, it is essential to conduct thorough research and consider your risk tolerance before making any investment decisions.