There are mixed expectations that a Republican victory would be more favorable for Bitcoin, but some analysts believe the asset could rise regardless of the election outcome, driven by broader macroeconomic factors.
Bitcoin Price Outlook Ahead of U.S. Presidential Elections:
According to Bloomberg, crypto options traders are increasingly betting on Bitcoin reaching new highs by the end of November. The highest open interest for options expiring on November 8 is at the $75,000 strike price, signaling this as a key focus for the market.
Traders have long viewed a win by Republican Donald Trump as bullish for Bitcoin due to his pro-crypto stance and promises to strengthen the U.S.’s position in the cryptocurrency space. Conversely, Democrat Kamala Harris has pledged to introduce regulations for consumer protection but has not made similar commitments to promote Bitcoin. This has led to skewed expectations favoring a Republican victory as better for Bitcoin. However, several experts argue that the asset is likely to increase either way, thanks to other macroeconomic factors at play.
“Both Presidential candidates have adopted pro-crypto stances to attract voters, but it’s uncertain if these promises will materialize,” said Jeff Mei, COO at crypto exchange BTSE, in a message to CoinDesk. He added, “The market is responding positively to the prospect of new administration policies. Regardless of whether Harris or Trump wins, traders seem to view any change as a net positive.”
Mei also noted that the first Federal Reserve rate cuts in four years, coupled with a recent rise in stock prices, support the view that Bitcoin could surpass its previous all-time high and possibly reach $80,000.
Options Trading Trends Reflect Optimism:
The trend among options traders is leaning towards a surge in Bitcoin’s price post-election, with significant interest in call options expiring on November 29 at the $80,000 strike price, followed by $70,000. For options expiring on December 27, open interest is clustered around $80,000 and $100,000. This suggests a bullish sentiment for the asset in the coming months.
However, some analysts interpret the trading patterns as more of an election hedge rather than a straightforward bet on price increases. Augustine Fan, head of insights at SOFA, commented, “I wouldn’t call the $80,000 calls on BTC a bet on higher prices; it’s more like a cost-effective option against a potential broader market rally.” Fan added that Bitcoin’s implied volatility has not surged significantly, even though options indicate a preference for higher prices after the election.
As of now, Bitcoin has dipped 0.7% in the past 24 hours, according to CoinGecko data, but it still outperformed the broader CoinDesk 20 index, which saw a 1.6% drop.
