Bitcoin traders brace for volatility as the U.S. election nears, driven by uncertainty and potential policy shifts that could impact market movements.
Bitcoin investors anticipate significant market volatility following Tuesday’s election in the United States. A 30-day index of implied swings in the largest digital asset has reached its highest level since a worldwide market crash roiled investors in August. The index, developed by CF Benchmarks Ltd., is based on CME Group Bitcoin options prices.
The options market also predicts changes of roughly 8% in either way the day following the vote, compared to 2% up or down on a regular day. According to Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for crypto derivative trading.
“No significant volatility premium is priced in after November 7, implying the market expects a fairly quick resolution,” Mauron added. “This might prove optimistic, considering how close a race the polls are showing.”
The race between Republican contender Donald Trump and Democratic challenger Vice President Kamala. Harris is coming down to the wire, with investors across asset classes bracing for market volatility. During the campaign, Trump was outspokenly pro-crypto. While Harris adopted a more cautious approach, promising to support a regulated framework for digital assets.
Trump Trade
In contrast to President Joe Biden’s industry crackdown, both viewpoints sparked hope in the crypto world. However, Trump’s strong support for the industry has made Bitcoin one of several so-called Trump trades.
The former president’s advantage against Harris in betting markets helped propel Bitcoin to a near-record high a week ago, but his odds have since plummeted, driving the token down. Polling suggests a close race, but Harris has seen some promising indicators in last-ditch voter intention polls.
According to a research from Derive.xyz, a crypto derivatives trading arena, an equitable distribution of bearish and bullish options for Bitcoin throughout October shows that speculators are equally ready for upward and lower moves leading up to the US election.
According to statistics from the Deribit market, the trading range for bearish and optimistic wagers may be $60,000 to $80,000 in the weeks following the election, depending on peak open interest — or outstanding contracts.
Bitcoin was trading at $69,000 as of 9 a.m. Monday in London. In March, the digital asset reached an all-time high of $73,798, helped by inflows into specialized US exchange-traded funds. The original cryptocurrency has risen by more than 60% in 2024, surpassing equities and gold.
Read more: Trump Victory Buzz Pushes Bitcoin to Historic High
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