Bitcoin investors are bracing for increased market volatility following US Election Day.
Bitcoin Investors Brace for High Volatility as US Election Approaches
The 30-day indicator of Bitcoin volatility recently reached its highest point since August, signaling that investors expect sharp price swings. The index, compiled by CF Benchmarks Ltd., is based on CME Group’s Bitcoin options pricing.
Orbit Markets co-founder Caroline Mauron noted that options pricing was indicating potential moves of up to 8% in either direction immediately following the election, compared to the typical daily swing of around 2%.
“There is no significant volatility premium priced in after November 7, suggesting the market is expecting a fairly rapid resolution,” Mauron said. However, he cautioned that this could be optimistic given the close voting among the candidates.
The fierce competition between Republican candidate Donald Trump, who has espoused pro-crypto policies, and Democratic Vice President Kamala Harris, who has advocated for regulated digital assets, has intensified traders’ interest.
Trump’s strong crypto stance had previously pushed Bitcoin higher, sending it to near-record highs when betting markets were bullish on Trump. However, his odds have since narrowed, causing Bitcoin to pull back slightly.
Data from the Deribit exchange projected a potential post-election trading range of $60,000 to $80,000, suggesting traders remain divided. Bitcoin, which traded around $68,000 on Monday, has gained more than 60% this year, outperforming stocks and gold.
*This is not investment advice.