TechFlow news — On November 5, QCP Capital's latest analysis indicated that with the U.S. presidential election approaching, the crypto options market is pricing in a +/- 3.5% fluctuation for Bitcoin on election night. However, traders may be underestimating post-election risks, as volatility premiums expiring on November 8 are relatively low, suggesting the market expects results to be called swiftly.
Currently, the so-called "Trump trade"—including long positions in the dollar, cryptocurrencies, and bets on rising Treasury yields—is gaining momentum as Trump leads in prediction markets. Yet, if Harris wins, these gains could reverse sharply, triggering significant market volatility.
Bitcoin remains viewed as part of the "Trump trade." On Monday, as a poll showed Harris taking a narrow lead in Iowa, Bitcoin spot prices declined alongside substantial outflows from spot ETFs. Analysts expect heightened volatility in Bitcoin’s spot price as vote counts are released.
Congressional election outcomes could be as consequential as the presidential race. A full Republican sweep may lead to larger fiscal deficits, prompting a more hawkish stance from the Fed, which would weigh on risk assets. Conversely, a divided legislature could foster market stability and gradually reduce volatility.
