Early-Warning Signals of Political Risk in Stablecoin Markets: Human and Algorithmic Behavior Around the 2024 U.S. Election

Kundan Mukhia; Buddha Nath Sharma; Salam Rabindrajit Luwang; Md. Nurujjaman; Chittaranjan Hens; Suman Saha; Tanujit Chakraborty

arXiv · 2512.00893

Early-Warning Signals of Political Risk in Stablecoin Markets: Human and Algorithmic Behavior Around the 2024 U.S. Election

Kundan Mukhia·Buddha Nath Sharma·Salam Rabindrajit Luwang·Md. Nurujjaman·Chittaranjan Hens·Suman Saha·Tanujit Chakraborty

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Abstract

We study how the 2024 U.S. presidential election, viewed as a major political risk event, affected cryptocurrency markets by distinguishing human-driven peer-to-peer stablecoin transactions from automated algorithmic activity. Using structural break analysis, we find that human-driven Ethereum Request for Comment 20 (ERC-20) transactions shifted on November 3, two days before the election, while exchange trading volumes reacted only on Election Day. Automated smart-contract activity adjusted much later, with structural breaks appearing in January 2025. We validate these shifts using surrogate-based robustness tests. Complementary energy-spectrum analysis of Bitcoin and Ethereum identifies pronounced post-election turbulence, and a structural vector autoregression confirms a regime shift in stablecoin dynamics. Overall, human-driven stablecoin flows act as early-warning indicators of political stress, preceding both exchange behavior and algorithmic responses.

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BibTeX RIS

Kundan Mukhia, Buddha Nath Sharma, Salam Rabindrajit Luwang, Md. Nurujjaman, Chittaranjan Hens, Suman Saha, Tanujit Chakraborty. 2025-11-30. Early-Warning Signals of Political Risk in Stablecoin Markets: Human and Algorithmic Behavior Around the 2024 U.S. Election. https://arxiv.org/abs/2512.00893

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