Bitcoin Speculators on High Alert: Volatility Expected After US Election

Bitcoin Speculators on High Alert: Volatility Expected After US ElectionBitcoin speculators are closely watching market movements following Tuesday's US election, as analysis suggests the digital asset could face significant volatility. The 30-day implied volatility index, derived from Chicago Mercantile Exchange (CME) bitcoin options prices, has reached its highest level since the global market sell-off in August, signaling market expectations of future price swings

Bitcoin Speculators on High Alert: Volatility Expected After US Election

Bitcoin speculators are closely watching market movements following Tuesday's US election, as analysis suggests the digital asset could face significant volatility. The 30-day implied volatility index, derived from Chicago Mercantile Exchange (CME) bitcoin options prices, has reached its highest level since the global market sell-off in August, signaling market expectations of future price swings.

Caroline Mauron, co-founder of OrbitMarkets, a cryptocurrency derivatives trading liquidity provider, said that the options market also suggests potential one-day moves of up to 8% after the election, compared to the usual daily moves of 2%. This data indicates that markets anticipate a significant impact on bitcoin prices from the election outcome.

While Mauron added that there isn't a significant volatility premium seen after November 7th, indicating investors expect a quick return to stability, the reality might not be so optimistic. Considering the current polls show a close race, the election results could trigger a more volatile market reaction.

Republican candidate Donald Trump has openly supported cryptocurrencies in his campaign, while his Democratic rival, Vice President Kamala Harris, has been more cautious, pledging support for a digital asset regulatory framework. These contrasting stances have fueled market speculation about future policy direction, further intensifying market volatility.

The exact impact of the election results on bitcoin prices remains unclear. However, it is certain that the market's sensitivity to the election results is evident, and bitcoin will likely experience a volatile period in the coming days. For investors, it is crucial to remain cautious, monitor market developments closely, and formulate investment strategies aligned with their risk tolerance.