As the US Presidential Election approaches, the crypto market is experiencing significant volatility, mostly due to the uncertainty surrounding the outcome of the election. Bitcoin (BTC) is currently trading at around $68.921.62, while Ethereum is trading at $2,454. These patterns indicate that investors are growing nervous since the outcome of the election might have a big effect on the market dynamics.
Current Bitcoin Scenario And Volatility
According to Coindesk, the implied volatility of Bitcoin has increased to its highest levels in three months. The Deribit Bitcoin Implied Volatility Index (DVOL) has risen to 63.24 per cent on a yearly basis. This increase demonstrates how investors are becoming increasingly concerned about possible market movements in the run-up to the US Presidential Election.
Anuj Chaudhary, Cardano Blockchain Lead in India, says: “As the election results approach, investors typically become more cautious, adopting a wait-and-watch strategy while tracking political developments. This uncertainty amplifies volatility, with sentiment fluctuating in response to news updates and polling data.”
Also the seven-day implied volatility of Bitcoin has increased to an annualised 74.4 per cent, indicating expectations surrounding the outcome of the election and the next Federal Reserve meeting.
Anuj adds: “The long-term trajectory of Bitcoin and the larger cryptocurrency industry will be greatly influenced by the outcome of the US Presidential Election. A change in government could introduce new regulations or support initiatives that could affect market confidence. The perception of inflation may be influenced by spending and taxing policies, which in turn might impact the appeal of Bitcoin as a hedge. In the end, how the election turns out may change how people view and care about cryptocurrencies, which might increase or decrease demand.”
Investor Strategy Amid Volatility
With Bitcoin reversing from its most recent all-time high of $73,777, experts have urged investors to employ astute strategies to control this elevated volatility.
Vedang Vatsa, founder of Hashtag Web3, says: “Follow the election developments and the possible effects on cryptocurrency markets to manage the increased volatility in Bitcoin during election season. It’s crucial to diversify your investments among a range of assets to reduce risk. Also prevent rash judgments during market swings. Clearly define your investing goals, and set up predefined entry and exit points.”
Regulatory Impact On Cryptocurrency
The regulatory environment around cryptocurrencies may be drastically altered by the results of the US Presidential Election.
According to Vedang, the outcome of the election would also affect society in the long run.
“Speculations indicate that a Trump victory could lead to policies promoting cryptocurrency adoption and innovation, which may boost market growth. A Harris Administration may enact stricter rules that would provide more transparent regulatory frameworks and possibly impede development. The election will have a big impact on the Bitcoin scene, regardless of the result,” he adds.
