Markets Brace for Impact Before Election Night

As the 2024 US presidential election draws near, market tensions escalate across stocks, treasury bonds, and cryptocurrencies. With the election anticipated to be fiercely contested, traders are preparing for potential fluctuations. Long positions, often referred to as the “Trump trade,” have gained traction with Donald Trump leading in predictive markets. According to QCP Capital, a win for Kamala Harris could disrupt these trends, resulting in notable overnight market shifts.

Will Bitcoin Experience Significant Price Movement?

Experts predict a possible +/- 3.5% movement in Bitcoin’s spot price on election night. However, the market may not have accounted for the total risks that could arise after the election. Current volatility premiums in futures markets suggest that investors are anticipating a swift resolution to the election, potentially underestimating the impacts of drawn-out results.

What Does the Congress Race Mean for Volatility?

The outcome of congressional races could heavily influence market conditions, potentially as much as the presidential vote. A Republican win might lead to increased budget deficits, prompting the Federal Reserve to adopt stricter monetary policies, adversely affecting riskier assets. On the other hand, a split legislature could promote stability and reduce market volatility.

Market indicators show balanced interest in both call and put options as election day arrives. Notably, there’s an increase in upper-end calls and lower-end puts, reflecting a complex positioning ahead of the vote. Key points include:

• High volatility is anticipated, echoing patterns seen in previous elections.
• Market reactions may hinge on polling outcomes, especially in battleground states.
• Bitcoin remains linked to the broader “Trump trade,” influencing its perceived value.

As polling data begins to surface, Bitcoin’s spot price is expected to fluctuate, adding to the uncertainty that traders will navigate on election night.