With less than three weeks remaining until the US presidential election, ambiguity in the BTC market has escalated, with premiums on associated options transactions already hitting 10 percent. A substantial number of long-term call option transactions involving 600 contracts at a strike price of $120,000 appeared during the US trading session. Concurrently, the BTC spot ETF recorded $456.9 million in inflows yesterday, marking four consecutive days of capital influx. Traders are gearing up for what unfolds post 5 November and how the new administration will react to elements influencing financial markets, including cryptocurrencies.
Cryptocurrencies have been experiencing an upward trend over the past week, spurred by China’s stimulus initiatives, interest rate reductions by Western central banks, and likely the U.S. election becoming a more pronounced focal point for the reasons behind the recent increase.
Although cryptocurrencies only gained considerable popularity during a previous presidential election (2020), the latter half of October typically signifies the onset of a bullish phase for financial assets like equities, thus the recent movements in cryptocurrencies may not be unexpected.
In fact, Bitcoin’s (BTC) performance, based on Coinglass data from 2013 to 2023, indicates that returns in the latter half of October (16-31) are double those of the first half (1-15).
(Source: Coinglass)
Election Influence
Insights from ETC Group, a division of Bitwise Asset Management, reveal that there is indecision in token prices stemming from the electoral outcome.
Utilizing implied returns against theoretical values, ETC Group discovered that Bitcoin could gain 10% in either direction contingent on the election results. Given that the current spot price is slightly under $68,000, a 10 percent increase would lead to a new peak, exceeding March’s $73,750.07. The analysis also indicated that the election’s effects will likely resonate most profoundly with Cardano (ADA) and Dogecoin (DOGE), which have risen by 18% and 20%, respectively.
（Source: ETC Group）
Moreover, Ycharts statistics reveal that in presidential election years since 1950, the stock market tends to reach its lowest point in September and/or October before rebounding in November. Thus far, this trend is evident in the S&P 500 and Nasdaq, which have both increased since the beginning of last month.
（Source: YCharts）
Apart from the U.S. election, the options market indicates a bullish stance towards bitcoin, with the majority of call open positions concentrated at $70,000 and $80,000 strike prices. Set to expire on 29 November, the strike prices have notional values of $141 million and $120 million, respectively.
The bullish sentiment was even more prominent for the December 27 expiry, with the majority of call open positions clustering around $100,000 strike prices with a combined notional value exceeding $620 million, per Deribit.
Geoffrey Kendrick, who leads global digital asset research at the British multinational bank Standard Chartered, noted in a report on Tuesday, ‘As the U.S. election nears, Trump is the most probable candidate to be elected, and even from a digital asset perspective, Harris appears favorable as well, suggesting that the broader digital asset ecosystem may increasingly go mainstream.’
‘For BTC, this implies that Bitcoin is poised to ascend to an all-time high of $74K ahead of the election.’
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