Bitcoin Volatility Jumps to 3-Month High Ahead of U.S. Election

An
options-based
measure
of
expected
price
swings
in
bitcoin

(BTC)
has
hit
a
three-month
high
amid
indications
from
betting
markets
of
a
tightly
contested
U.S.
presidential
race
in
crucial
swing
states.

Leading
crypto
options
exchange
Deribit’s
bitcoin
implied
volatility
index
(DVOL),
a
closely
watched
gauge
of
expected
price
swings
over
30
days,
rose
to
an
annualized
63.24%,
the
highest
since
late
July,
according
to
charting
platform
TradingView.

BTC’s
seven-day
implied
volatility,
which
captures
the
Fed
meeting
due
Thursday
and
expected
election
results
on
Friday,
has
jumped
to
an
annualized
74.4%,
significantly
higher
than
the
7-day
realized
or
historical
volatility
of
41.4%.

That
indicates
“a
significant
risk
premium
around
the
elections,”
Singapore-based
crypto
trading
firm
QCP
Capital
said
in
a
Telegram
broadcast.

Early
Sunday,
the
probability
of
pro-crypto
Republican
candidate
Donald
Trump
winning
the
critical
swing
state
of
Pennsylvania

weakened
sharply
to
53%
from
61%
on
the
decentralized
predictions
platform
Polymarket.

BTC
almost
hit
record
highs
early
this
week,
rising
to
$73,500
Tuesday
as
betting
platforms
pointed
to
a
comfortable
Trump
lead.
Since
then,
however,
Trump’s
odds
and
BTC’s
price
have
retreated,
with
the
latter

falling
below
$68,000
early
today.

Options-based
metrics,
measuring
expected
price
turbulence
over
four
weeks,
have
also
jumped
in
foreign
exchange
and
U.S.
Treasury
markets.

The
Ice
BofA
Move
index,
a
measure
of
30-day
implied
volatility
in
Treasury
notes,
jumped
to
135%
Friday,
the
highest
since
October
2023.

Increased
volatility
in
the
U.S.
Treasury
notes,
which
play
a
significant
role
in
global
leveraged
financing,
causes
liquidity
tightening
and
often
leads
to

traders
trimming
their
exposure
to
risk
assets
such
as
cryptocurrencies.

Elsewhere,
the
one-week
implied
volatility
in
EUR/USD,
the
most
liquid
pair
in
the
currency
markets,
rose
to
its
highest
since
the
mini-U.S.
banking
crisis
of
March
2023.