Singapore-based cryptocurrency trading firm QCP Capital released a market analysis highlighting widespread market anxiety across stocks, treasuries, and cryptocurrencies as the US approaches one of the closest presidential elections in history.
A trend dubbed the “Trump trade”—involving long positions in the dollar, cryptocurrency, and bets on rising Treasury yields—has gained momentum, driven by Donald Trump’s lead in prediction markets. However, should Kamala Harris secure victory, these gains could reverse abruptly, potentially causing high market volatility overnight.
QCP Capital notes that the cryptocurrency market is currently anticipating a 3.5% movement in Bitcoin spot prices on election night. However, traders might be underestimating the risk beyond November 8th, as the lack of a volatility premium suggests expectations of a swift resolution, potentially overlooking the possibility of delays or a contested outcome.
Historically, unexpected election outcomes have led to strong market reactions. In 2016, Donald Trump’s surprise victory caused US futures to initially plummet before rebounding, resulting in the most active trading days of that half-year. Similarly, in 2020, the race was not officially called for Joe Biden until four days later, driving trading volumes to a six-month peak.
The analysis also emphasizes the potential impact of congressional races. A Republican sweep could signal larger fiscal deficits, possibly leading to a more hawkish Federal Reserve—an unfavorable scenario for risk assets. In contrast, a divided government might result in more stable markets with reduced volatility.
Currently, the options market reflects a balanced sentiment between call and put options, with activity in both topside calls and downside puts. Despite this, Bitcoin continues to be perceived as part of the “Trump trade.” BTC spot prices fell after outflows from spot ETFs on Monday, coinciding with a poll showing Kamala Harris’s slight lead in Iowa. As election results begin to emerge, QCP Capital anticipates erratic swings in BTC spot prices.
Bitcoin Steadies Below $69,000 Amid Fluctuations
As of the current writing, Bitcoin is trading at $68,831, reflecting a modest increase of 0.16% over the past 24 hours. The cryptocurrency’s intraday range saw a low of $66,896 and a high of $69,158. Bitcoin’s market capitalization currently stands at $1.36 trillion. Meanwhile, Bitcoin’s market dominance has decreased by 0.14%, settling at 59.37%.
On a broader scale, the global cryptocurrency market cap has dipped by 0.11%, now totaling $2.29 trillion. Despite this decline, overall market volume has surged by 11.95%, reaching $84.37 billion, based on data from CoinMarketCap.
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