As the U.S. presidential election approaches, cryptocurrency investors are anticipating potential volatility in the market. The outcome of the election could have significant implications for the future of crypto in the medium to long term. Looking at the implied volatilities for BTC and ETH options, there is a noticeable spike around the election date, indicating an overall increase in volatility during that period. Surprisingly, the BTC Put/Call Skew signals optimism across the curve, with even longer-dated options showing a call premium over puts, despite the uncertainty surrounding the election results.
Since President Biden withdrew from the race in July, the crypto community has shown support for Trump, especially after an attempted assassination on July 12th. Following the incident, Bitcoin’s price surged from $56,000 to $65,000, with expectations that Trump would benefit from the situation. Trump’s stance on crypto has evolved over time, initially expressing skepticism but later embracing the technology and even accepting bitcoin donations for his campaign. His commitment to making the U.S. a “bitcoin superpower” has garnered support from the crypto community.
On the other hand, Vice President Harris has signaled a more positive stance towards crypto, contrasting with the Biden administration’s stricter approach to legislation. The crypto industry has significantly increased its donations to political campaigns, with crypto corporations contributing a substantial amount to this year’s election funds. Despite the perceived differences between the candidates, the options market remains cautiously optimistic about the future of crypto, regardless of the election outcome.
With approximately 40% of American adults owning crypto, both candidates are under pressure to address the industry’s demands for regulatory clarity and a level playing field. The evolution of the crypto industry from a niche market to a powerful lobbying force reflects its growing influence in the political landscape. Whether the candidates will follow through on their promises remains to be seen, but the industry’s progress is evident in its ability to shape the conversation around regulation and innovation.
In conclusion, while there may be preferences within the crypto community for one candidate over the other, the overall sentiment remains optimistic about the industry’s future. The increasing involvement of crypto companies in political donations underscores the growing influence of the sector in shaping policy decisions. Regardless of the election outcome, the crypto industry is poised to continue its trajectory towards mainstream adoption and regulatory acceptance.